Correlation Between Yanzhou Coal and China Eastern
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and China Eastern 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 China Eastern 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 China Eastern Airlines, you can compare the effects of market volatilities on Yanzhou Coal and China Eastern 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 China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and China Eastern.
Diversification Opportunities for Yanzhou Coal and China Eastern
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yanzhou and China is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines 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 China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and China Eastern go up and down completely randomly.
Pair Corralation between Yanzhou Coal and China Eastern
Assuming the 90 days horizon Yanzhou Coal Mining is expected to under-perform the China Eastern. But the stock apears to be less risky and, when comparing its historical volatility, Yanzhou Coal Mining is 1.94 times less risky than China Eastern. The stock trades about -0.23 of its potential returns per unit of risk. The China Eastern Airlines is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 30.00 in China Eastern Airlines on November 1, 2024 and sell it today you would lose (1.00) from holding China Eastern Airlines or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. China Eastern Airlines
Performance |
| Timeline |
| Yanzhou Coal Mining |
| China Eastern Airlines |
Yanzhou Coal and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and China Eastern
The main advantage of trading using opposite Yanzhou Coal and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, China Eastern 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 China Eastern will offset losses from the drop in China Eastern's long position.| Yanzhou Coal vs. Entravision Communications | Yanzhou Coal vs. Spirent Communications plc | Yanzhou Coal vs. PLAYTECH | Yanzhou Coal vs. Charter Communications |
| China Eastern vs. Fast Retailing Co | China Eastern vs. Yanzhou Coal Mining | China Eastern vs. The Trade Desk | China Eastern vs. MINCO SILVER |
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.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |