Correlation Between Yanzhou Coal and FIRST SAVINGS
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and FIRST SAVINGS 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 FIRST SAVINGS 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 FIRST SAVINGS FINL, you can compare the effects of market volatilities on Yanzhou Coal and FIRST SAVINGS 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 FIRST SAVINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and FIRST SAVINGS.
Diversification Opportunities for Yanzhou Coal and FIRST SAVINGS
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yanzhou and FIRST is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and FIRST SAVINGS FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SAVINGS FINL 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 FIRST SAVINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SAVINGS FINL has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and FIRST SAVINGS go up and down completely randomly.
Pair Corralation between Yanzhou Coal and FIRST SAVINGS
Assuming the 90 days horizon Yanzhou Coal Mining is expected to under-perform the FIRST SAVINGS. But the stock apears to be less risky and, when comparing its historical volatility, Yanzhou Coal Mining is 1.35 times less risky than FIRST SAVINGS. The stock trades about -0.27 of its potential returns per unit of risk. The FIRST SAVINGS FINL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,200 in FIRST SAVINGS FINL on October 28, 2024 and sell it today you would earn a total of 40.00 from holding FIRST SAVINGS FINL or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. FIRST SAVINGS FINL
Performance |
| Timeline |
| Yanzhou Coal Mining |
| FIRST SAVINGS FINL |
Yanzhou Coal and FIRST SAVINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and FIRST SAVINGS
The main advantage of trading using opposite Yanzhou Coal and FIRST SAVINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, FIRST SAVINGS 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 FIRST SAVINGS will offset losses from the drop in FIRST SAVINGS's long position.| Yanzhou Coal vs. China Shenhua Energy | Yanzhou Coal vs. PT Bayan Resources | Yanzhou Coal vs. Whitehaven Coal Limited | Yanzhou Coal vs. PT Bumi Resources |
| FIRST SAVINGS vs. POSBO UNSPADRS20YC1 | FIRST SAVINGS vs. Postal Savings Bank | FIRST SAVINGS vs. Truist Financial | FIRST SAVINGS vs. OVERSEA CHINUNSPADR2 |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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