Correlation Between Yamaha and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both Yamaha and Yanzhou Coal 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 Yamaha and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yamaha Motor Co and Yanzhou Coal Mining, you can compare the effects of market volatilities on Yamaha and Yanzhou Coal 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 Yamaha with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yamaha and Yanzhou Coal.
Diversification Opportunities for Yamaha and Yanzhou Coal
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yamaha and Yanzhou is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Yamaha Motor Co and Yanzhou Coal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yanzhou Coal Mining and Yamaha 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 Yamaha Motor Co are associated (or correlated) with Yanzhou Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yanzhou Coal Mining has no effect on the direction of Yamaha i.e., Yamaha and Yanzhou Coal go up and down completely randomly.
Pair Corralation between Yamaha and Yanzhou Coal
Assuming the 90 days horizon Yamaha Motor Co is expected to under-perform the Yanzhou Coal. In addition to that, Yamaha is 2.01 times more volatile than Yanzhou Coal Mining. It trades about -0.07 of its total potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.12 per unit of volatility. If you would invest 1,076 in Yanzhou Coal Mining on November 27, 2024 and sell it today you would lose (43.00) from holding Yanzhou Coal Mining or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Yamaha Motor Co vs. Yanzhou Coal Mining
Performance |
| Timeline |
| Yamaha Motor |
| Yanzhou Coal Mining |
Yamaha and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yamaha and Yanzhou Coal
The main advantage of trading using opposite Yamaha and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yamaha position performs unexpectedly, Yanzhou Coal 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 Yanzhou Coal will offset losses from the drop in Yanzhou Coal's long position.| Yamaha vs. Isuzu Motors | Yamaha vs. Renault SA | Yamaha vs. Mazda Motor Corp | Yamaha vs. Bayerische Motoren Werke |
| Yanzhou Coal vs. Indo Tambangraya Megah | Yanzhou Coal vs. Bukit Asam Tbk | Yanzhou Coal vs. Geo Energy Resources | Yanzhou Coal vs. Yancoal Australia |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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