Correlation Between Yancoal Australia and Windrock Land
Can any of the company-specific risk be diversified away by investing in both Yancoal Australia and Windrock Land at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Yancoal Australia and Windrock Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yancoal Australia and Windrock Land Co, you can compare the effects of market volatilities on Yancoal Australia and Windrock Land and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Yancoal Australia with a short position of Windrock Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yancoal Australia and Windrock Land.
Diversification Opportunities for Yancoal Australia and Windrock Land
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yancoal and Windrock is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Yancoal Australia and Windrock Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Windrock Land and Yancoal Australia is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Yancoal Australia are associated (or correlated) with Windrock Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Windrock Land has no effect on the direction of Yancoal Australia i.e., Yancoal Australia and Windrock Land go up and down completely randomly.
Pair Corralation between Yancoal Australia and Windrock Land
Assuming the 90 days horizon Yancoal Australia is expected to generate 3.08 times more return on investment than Windrock Land. However, Yancoal Australia is 3.08 times more volatile than Windrock Land Co. It trades about 0.02 of its potential returns per unit of risk. Windrock Land Co is currently generating about 0.06 per unit of risk. If you would invest 415.00 in Yancoal Australia on August 29, 2024 and sell it today you would earn a total of 3.00 from holding Yancoal Australia or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yancoal Australia vs. Windrock Land Co
Performance |
| Timeline |
| Yancoal Australia |
| Windrock Land |
Yancoal Australia and Windrock Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yancoal Australia and Windrock Land
The main advantage of trading using opposite Yancoal Australia and Windrock Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yancoal Australia position performs unexpectedly, Windrock Land can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Windrock Land will offset losses from the drop in Windrock Land's long position.| Yancoal Australia vs. New Hope | Yancoal Australia vs. Thungela Resources Limited | Yancoal Australia vs. Whitehaven Coal Limited | Yancoal Australia vs. China Coal Energy |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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