Correlation Between Yanzhou Coal and Entravision Communications
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and Entravision Communications 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 Entravision Communications 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 Entravision Communications, you can compare the effects of market volatilities on Yanzhou Coal and Entravision Communications 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 Entravision Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and Entravision Communications.
Diversification Opportunities for Yanzhou Coal and Entravision Communications
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yanzhou and Entravision is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and Entravision Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entravision Communications 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 Entravision Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entravision Communications has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and Entravision Communications go up and down completely randomly.
Pair Corralation between Yanzhou Coal and Entravision Communications
Assuming the 90 days horizon Yanzhou Coal Mining is expected to generate 0.31 times more return on investment than Entravision Communications. However, Yanzhou Coal Mining is 3.23 times less risky than Entravision Communications. It trades about -0.1 of its potential returns per unit of risk. Entravision Communications is currently generating about -0.09 per unit of risk. If you would invest 1,040 in Yanzhou Coal Mining on November 9, 2024 and sell it today you would lose (40.00) from holding Yanzhou Coal Mining or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. Entravision Communications
Performance |
| Timeline |
| Yanzhou Coal Mining |
| Entravision Communications |
Yanzhou Coal and Entravision Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and Entravision Communications
The main advantage of trading using opposite Yanzhou Coal and Entravision Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, Entravision Communications 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 Entravision Communications will offset losses from the drop in Entravision Communications' long position.| Yanzhou Coal vs. CHRYSALIS INVESTMENTS LTD | Yanzhou Coal vs. HK Electric Investments | Yanzhou Coal vs. EITZEN CHEMICALS | Yanzhou Coal vs. Eastman Chemical |
| Entravision Communications vs. STGEORGE MINING LTD | Entravision Communications vs. SQUIRREL MEDIA SA | Entravision Communications vs. Aya Gold Silver | Entravision Communications vs. ANGLO ASIAN MINING |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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