Correlation Between Yanzhou Coal and TELECOM ITALIA
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and TELECOM ITALIA 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 TELECOM ITALIA 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 TELECOM ITALIA, you can compare the effects of market volatilities on Yanzhou Coal and TELECOM ITALIA 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 TELECOM ITALIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and TELECOM ITALIA.
Diversification Opportunities for Yanzhou Coal and TELECOM ITALIA
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yanzhou and TELECOM is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and TELECOM ITALIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELECOM ITALIA 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 TELECOM ITALIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELECOM ITALIA has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and TELECOM ITALIA go up and down completely randomly.
Pair Corralation between Yanzhou Coal and TELECOM ITALIA
Assuming the 90 days horizon Yanzhou Coal Mining is expected to under-perform the TELECOM ITALIA. But the stock apears to be less risky and, when comparing its historical volatility, Yanzhou Coal Mining is 1.36 times less risky than TELECOM ITALIA. The stock trades about -0.27 of its potential returns per unit of risk. The TELECOM ITALIA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 24.00 in TELECOM ITALIA on October 28, 2024 and sell it today you would earn a total of 1.00 from holding TELECOM ITALIA or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. TELECOM ITALIA
Performance |
| Timeline |
| Yanzhou Coal Mining |
| TELECOM ITALIA |
Yanzhou Coal and TELECOM ITALIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and TELECOM ITALIA
The main advantage of trading using opposite Yanzhou Coal and TELECOM ITALIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, TELECOM ITALIA 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 TELECOM ITALIA will offset losses from the drop in TELECOM ITALIA's long position.| Yanzhou Coal vs. China Shenhua Energy | Yanzhou Coal vs. PT Bayan Resources | Yanzhou Coal vs. Yancoal Australia | Yanzhou Coal vs. Whitehaven Coal Limited |
| TELECOM ITALIA vs. Urban Outfitters | TELECOM ITALIA vs. Direct Line Insurance | TELECOM ITALIA vs. CyberArk Software | TELECOM ITALIA vs. REVO INSURANCE SPA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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