Correlation Between Yanzhou Coal and Plastic Omnium
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium, you can compare the effects of market volatilities on Yanzhou Coal and Plastic Omnium 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 Plastic Omnium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and Plastic Omnium.
Diversification Opportunities for Yanzhou Coal and Plastic Omnium
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yanzhou and Plastic is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastic Omnium 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 Plastic Omnium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Omnium has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and Plastic Omnium go up and down completely randomly.
Pair Corralation between Yanzhou Coal and Plastic Omnium
Assuming the 90 days horizon Yanzhou Coal Mining is expected to under-perform the Plastic Omnium. But the stock apears to be less risky and, when comparing its historical volatility, Yanzhou Coal Mining is 1.44 times less risky than Plastic Omnium. The stock trades about -0.26 of its potential returns per unit of risk. The Plastic Omnium is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 976.00 in Plastic Omnium on October 20, 2024 and sell it today you would earn a total of 98.00 from holding Plastic Omnium or generate 10.04% 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. Plastic Omnium
Performance |
| Timeline |
| Yanzhou Coal Mining |
| Plastic Omnium |
Yanzhou Coal and Plastic Omnium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and Plastic Omnium
The main advantage of trading using opposite Yanzhou Coal and Plastic Omnium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, Plastic Omnium 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 Plastic Omnium will offset losses from the drop in Plastic Omnium's long position.| Yanzhou Coal vs. Nok Airlines PCL | Yanzhou Coal vs. AEGEAN AIRLINES | Yanzhou Coal vs. SINGAPORE AIRLINES | Yanzhou Coal vs. COFCO Joycome Foods |
| Plastic Omnium vs. Grupo Carso SAB | Plastic Omnium vs. BII Railway Transportation | Plastic Omnium vs. GEELY AUTOMOBILE | Plastic Omnium vs. NTG Nordic Transport |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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