Correlation Between Yanzhou Coal and PT Bayan
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and PT Bayan 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 PT Bayan 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 PT Bayan Resources, you can compare the effects of market volatilities on Yanzhou Coal and PT Bayan 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 PT Bayan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and PT Bayan.
Diversification Opportunities for Yanzhou Coal and PT Bayan
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yanzhou and BNB is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and PT Bayan Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bayan Resources 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 PT Bayan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bayan Resources has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and PT Bayan go up and down completely randomly.
Pair Corralation between Yanzhou Coal and PT Bayan
Assuming the 90 days horizon Yanzhou Coal is expected to generate 1.31 times less return on investment than PT Bayan. In addition to that, Yanzhou Coal is 1.21 times more volatile than PT Bayan Resources. It trades about 0.03 of its total potential returns per unit of risk. PT Bayan Resources is currently generating about 0.04 per unit of volatility. If you would invest 76.00 in PT Bayan Resources on September 4, 2024 and sell it today you would earn a total of 39.00 from holding PT Bayan Resources or generate 51.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. PT Bayan Resources
Performance |
| Timeline |
| Yanzhou Coal Mining |
| PT Bayan Resources |
Yanzhou Coal and PT Bayan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and PT Bayan
The main advantage of trading using opposite Yanzhou Coal and PT Bayan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, PT Bayan 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 PT Bayan will offset losses from the drop in PT Bayan's long position.| Yanzhou Coal vs. Gamma Communications plc | Yanzhou Coal vs. UET United Electronic | Yanzhou Coal vs. STORE ELECTRONIC | Yanzhou Coal vs. Citic Telecom International |
| PT Bayan vs. Yanzhou Coal Mining | PT Bayan vs. Yanzhou Coal Mining | PT Bayan vs. PT Adaro Energy | PT Bayan vs. Whitehaven Coal Limited |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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