Correlation Between Yanzhou Coal and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and SBI Insurance 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 SBI Insurance 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 SBI Insurance Group, you can compare the effects of market volatilities on Yanzhou Coal and SBI Insurance 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and SBI Insurance.
Diversification Opportunities for Yanzhou Coal and SBI Insurance
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Yanzhou and SBI is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and SBI Insurance go up and down completely randomly.
Pair Corralation between Yanzhou Coal and SBI Insurance
Assuming the 90 days horizon Yanzhou Coal Mining is expected to under-perform the SBI Insurance. In addition to that, Yanzhou Coal is 1.07 times more volatile than SBI Insurance Group. It trades about -0.08 of its total potential returns per unit of risk. SBI Insurance Group is currently generating about 0.14 per unit of volatility. If you would invest 680.00 in SBI Insurance Group on December 9, 2024 and sell it today you would earn a total of 40.00 from holding SBI Insurance Group or generate 5.88% 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. SBI Insurance Group
Performance |
| Timeline |
| Yanzhou Coal Mining |
| SBI Insurance Group |
Yanzhou Coal and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and SBI Insurance
The main advantage of trading using opposite Yanzhou Coal and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| Yanzhou Coal vs. Hellenic Telecommunications Organization | ||
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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