Correlation Between Yanzhou Coal and PT Bank
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and PT Bank 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 Bank 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 Bank Rakyat, you can compare the effects of market volatilities on Yanzhou Coal and PT Bank 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 Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and PT Bank.
Diversification Opportunities for Yanzhou Coal and PT Bank
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yanzhou and BYRA is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat 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 Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Rakyat has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and PT Bank go up and down completely randomly.
Pair Corralation between Yanzhou Coal and PT Bank
Assuming the 90 days horizon Yanzhou Coal Mining is expected to generate 0.4 times more return on investment than PT Bank. However, Yanzhou Coal Mining is 2.48 times less risky than PT Bank. It trades about 0.01 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about -0.1 per unit of risk. If you would invest 1,080 in Yanzhou Coal Mining on October 10, 2024 and sell it today you would earn a total of 0.00 from holding Yanzhou Coal Mining or generate 0.0% 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. PT Bank Rakyat
Performance |
| Timeline |
| Yanzhou Coal Mining |
| PT Bank Rakyat |
Yanzhou Coal and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and PT Bank
The main advantage of trading using opposite Yanzhou Coal and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, PT Bank 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 Bank will offset losses from the drop in PT Bank's long position.| Yanzhou Coal vs. SBM OFFSHORE | Yanzhou Coal vs. Taiwan Semiconductor Manufacturing | Yanzhou Coal vs. Ultra Clean Holdings | Yanzhou Coal vs. PT Wintermar Offshore |
| PT Bank vs. Transport International Holdings | PT Bank vs. COSTCO WHOLESALE CDR | PT Bank vs. Caseys General Stores | PT Bank vs. VARIOUS EATERIES LS |
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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