Correlation Between Yanzhou Coal and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on Yanzhou Coal and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and Ross Stores.
Diversification Opportunities for Yanzhou Coal and Ross Stores
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yanzhou and Ross is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and Ross Stores go up and down completely randomly.
Pair Corralation between Yanzhou Coal and Ross Stores
Assuming the 90 days horizon Yanzhou Coal is expected to generate 3.06 times less return on investment than Ross Stores. In addition to that, Yanzhou Coal is 2.52 times more volatile than Ross Stores. It trades about 0.01 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.08 per unit of volatility. If you would invest 12,445 in Ross Stores on November 3, 2024 and sell it today you would earn a total of 2,051 from holding Ross Stores or generate 16.48% 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. Ross Stores
Performance |
| Timeline |
| Yanzhou Coal Mining |
| Ross Stores |
Yanzhou Coal and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and Ross Stores
The main advantage of trading using opposite Yanzhou Coal and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Yanzhou Coal vs. Stag Industrial | Yanzhou Coal vs. MAGNUM MINING EXP | Yanzhou Coal vs. Gol Intelligent Airlines | Yanzhou Coal vs. Jacquet Metal Service |
| Ross Stores vs. Insurance Australia Group | Ross Stores vs. Goodyear Tire Rubber | Ross Stores vs. ZURICH INSURANCE GROUP | Ross Stores vs. Direct Line Insurance |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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