Correlation Between Yokohama Rubber and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both Yokohama Rubber 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 Yokohama Rubber and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Yokohama Rubber and Yanzhou Coal Mining, you can compare the effects of market volatilities on Yokohama Rubber 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 Yokohama Rubber with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokohama Rubber and Yanzhou Coal.
Diversification Opportunities for Yokohama Rubber and Yanzhou Coal
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yokohama and Yanzhou is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding The Yokohama Rubber 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 Yokohama Rubber 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 The Yokohama Rubber 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 Yokohama Rubber i.e., Yokohama Rubber and Yanzhou Coal go up and down completely randomly.
Pair Corralation between Yokohama Rubber and Yanzhou Coal
Assuming the 90 days trading horizon The Yokohama Rubber is expected to generate 0.69 times more return on investment than Yanzhou Coal. However, The Yokohama Rubber is 1.44 times less risky than Yanzhou Coal. It trades about 0.03 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.26 per unit of risk. If you would invest 1,950 in The Yokohama Rubber on October 20, 2024 and sell it today you would earn a total of 10.00 from holding The Yokohama Rubber or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Yokohama Rubber vs. Yanzhou Coal Mining
Performance |
| Timeline |
| Yokohama Rubber |
| Yanzhou Coal Mining |
Yokohama Rubber and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokohama Rubber and Yanzhou Coal
The main advantage of trading using opposite Yokohama Rubber and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokohama Rubber 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.| Yokohama Rubber vs. SPORTING | Yokohama Rubber vs. TITANIUM TRANSPORTGROUP | Yokohama Rubber vs. GRENKELEASING Dusseldorf | Yokohama Rubber vs. LOANDEPOT INC A |
| Yanzhou Coal vs. Nok Airlines PCL | Yanzhou Coal vs. AEGEAN AIRLINES | Yanzhou Coal vs. SINGAPORE AIRLINES | Yanzhou Coal vs. COFCO Joycome Foods |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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