Correlation Between Yanzhou Coal and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and Endeavour Mining 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 Yanzhou Coal and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yanzhou Coal Mining and Endeavour Mining PLC, you can compare the effects of market volatilities on Yanzhou Coal and Endeavour Mining 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 Yanzhou Coal with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and Endeavour Mining.
Diversification Opportunities for Yanzhou Coal and Endeavour Mining
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yanzhou and Endeavour is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and Endeavour Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining PLC and Yanzhou Coal 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 Yanzhou Coal Mining are associated (or correlated) with Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining PLC has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and Endeavour Mining go up and down completely randomly.
Pair Corralation between Yanzhou Coal and Endeavour Mining
Assuming the 90 days horizon Yanzhou Coal Mining is expected to under-perform the Endeavour Mining. But the stock apears to be less risky and, when comparing its historical volatility, Yanzhou Coal Mining is 1.16 times less risky than Endeavour Mining. The stock trades about -0.34 of its potential returns per unit of risk. The Endeavour Mining PLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,769 in Endeavour Mining PLC on October 26, 2024 and sell it today you would earn a total of 55.00 from holding Endeavour Mining PLC or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. Endeavour Mining PLC
Performance |
| Timeline |
| Yanzhou Coal Mining |
| Endeavour Mining PLC |
Yanzhou Coal and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and Endeavour Mining
The main advantage of trading using opposite Yanzhou Coal and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, Endeavour Mining 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 Endeavour Mining will offset losses from the drop in Endeavour Mining's long position.| Yanzhou Coal vs. China Shenhua Energy | Yanzhou Coal vs. PT Bayan Resources | Yanzhou Coal vs. Yancoal Australia | Yanzhou Coal vs. Whitehaven Coal Limited |
| Endeavour Mining vs. Burlington Stores | Endeavour Mining vs. UNIVMUSIC GRPADR050 | Endeavour Mining vs. SYSTEMAIR AB | Endeavour Mining vs. SEALED AIR |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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