Correlation Between Yanzhou Coal and Calibre Mining
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and Calibre Mining 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 Calibre Mining 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 Calibre Mining Corp, you can compare the effects of market volatilities on Yanzhou Coal and Calibre Mining 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 Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and Calibre Mining.
Diversification Opportunities for Yanzhou Coal and Calibre Mining
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yanzhou and Calibre is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp 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 Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and Calibre Mining go up and down completely randomly.
Pair Corralation between Yanzhou Coal and Calibre Mining
Assuming the 90 days horizon Yanzhou Coal is expected to generate 2.87 times less return on investment than Calibre Mining. In addition to that, Yanzhou Coal is 1.28 times more volatile than Calibre Mining Corp. It trades about 0.02 of its total potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.07 per unit of volatility. If you would invest 103.00 in Calibre Mining Corp on December 13, 2024 and sell it today you would earn a total of 88.00 from holding Calibre Mining Corp or generate 85.44% 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. Calibre Mining Corp
Performance |
| Timeline |
| Yanzhou Coal Mining |
| Calibre Mining Corp |
Yanzhou Coal and Calibre Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and Calibre Mining
The main advantage of trading using opposite Yanzhou Coal and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, Calibre Mining 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 Calibre Mining will offset losses from the drop in Calibre Mining's long position.| Yanzhou Coal vs. CosmoSteel Holdings Limited | ||
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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