Correlation Between Yanzhou Coal and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and BJs Wholesale 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 BJs Wholesale 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 BJs Wholesale Club, you can compare the effects of market volatilities on Yanzhou Coal and BJs Wholesale 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 BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and BJs Wholesale.
Diversification Opportunities for Yanzhou Coal and BJs Wholesale
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Yanzhou and BJs is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club 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 BJs Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Wholesale Club has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and BJs Wholesale go up and down completely randomly.
Pair Corralation between Yanzhou Coal and BJs Wholesale
Assuming the 90 days horizon Yanzhou Coal Mining is expected to generate 2.29 times more return on investment than BJs Wholesale. However, Yanzhou Coal is 2.29 times more volatile than BJs Wholesale Club. It trades about 0.02 of its potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.04 per unit of risk. If you would invest 903.00 in Yanzhou Coal Mining on October 28, 2024 and sell it today you would earn a total of 77.00 from holding Yanzhou Coal Mining or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. BJs Wholesale Club
Performance |
| Timeline |
| Yanzhou Coal Mining |
| BJs Wholesale Club |
Yanzhou Coal and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and BJs Wholesale
The main advantage of trading using opposite Yanzhou Coal and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, BJs Wholesale 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 BJs Wholesale will offset losses from the drop in BJs Wholesale'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 |
| BJs Wholesale vs. EVS Broadcast Equipment | BJs Wholesale vs. Diamyd Medical AB | BJs Wholesale vs. Gold Road Resources | BJs Wholesale vs. Liberty Broadband |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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