Correlation Between Yanzhou Coal and Nisshinbo Holdings
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and Nisshinbo Holdings 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 Nisshinbo Holdings 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 Nisshinbo Holdings, you can compare the effects of market volatilities on Yanzhou Coal and Nisshinbo Holdings 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 Nisshinbo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and Nisshinbo Holdings.
Diversification Opportunities for Yanzhou Coal and Nisshinbo Holdings
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yanzhou and Nisshinbo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and Nisshinbo Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nisshinbo Holdings 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 Nisshinbo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nisshinbo Holdings has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and Nisshinbo Holdings go up and down completely randomly.
Pair Corralation between Yanzhou Coal and Nisshinbo Holdings
Assuming the 90 days horizon Yanzhou Coal Mining is expected to under-perform the Nisshinbo Holdings. In addition to that, Yanzhou Coal is 1.53 times more volatile than Nisshinbo Holdings. It trades about -0.25 of its total potential returns per unit of risk. Nisshinbo Holdings is currently generating about 0.14 per unit of volatility. If you would invest 515.00 in Nisshinbo Holdings on October 23, 2024 and sell it today you would earn a total of 15.00 from holding Nisshinbo Holdings or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. Nisshinbo Holdings
Performance |
| Timeline |
| Yanzhou Coal Mining |
| Nisshinbo Holdings |
Yanzhou Coal and Nisshinbo Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and Nisshinbo Holdings
The main advantage of trading using opposite Yanzhou Coal and Nisshinbo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, Nisshinbo Holdings 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 Nisshinbo Holdings will offset losses from the drop in Nisshinbo Holdings' long position.| Yanzhou Coal vs. ATRESMEDIA | Yanzhou Coal vs. CNVISION MEDIA | Yanzhou Coal vs. SK TELECOM TDADR | Yanzhou Coal vs. Citic Telecom International |
| Nisshinbo Holdings vs. Yanzhou Coal Mining | Nisshinbo Holdings vs. MCEWEN MINING INC | Nisshinbo Holdings vs. Globex Mining Enterprises | Nisshinbo Holdings vs. Sims Metal Management |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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