Correlation Between Yanzhou Coal and Clean Energy
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and Clean Energy 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 Clean Energy 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 Clean Energy Fuels, you can compare the effects of market volatilities on Yanzhou Coal and Clean Energy 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 Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and Clean Energy.
Diversification Opportunities for Yanzhou Coal and Clean Energy
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yanzhou and Clean is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels 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 Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and Clean Energy go up and down completely randomly.
Pair Corralation between Yanzhou Coal and Clean Energy
Assuming the 90 days horizon Yanzhou Coal Mining is expected to under-perform the Clean Energy. But the stock apears to be less risky and, when comparing its historical volatility, Yanzhou Coal Mining is 2.04 times less risky than Clean Energy. The stock trades about -0.18 of its potential returns per unit of risk. The Clean Energy Fuels is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 248.00 in Clean Energy Fuels on October 25, 2024 and sell it today you would earn a total of 31.00 from holding Clean Energy Fuels or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. Clean Energy Fuels
Performance |
| Timeline |
| Yanzhou Coal Mining |
| Clean Energy Fuels |
Yanzhou Coal and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and Clean Energy
The main advantage of trading using opposite Yanzhou Coal and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, Clean Energy 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 Clean Energy will offset losses from the drop in Clean Energy's long position.| Yanzhou Coal vs. Geely Automobile Holdings | Yanzhou Coal vs. Direct Line Insurance | Yanzhou Coal vs. NAKED WINES PLC | Yanzhou Coal vs. BANK OF CHINA |
| Clean Energy vs. Reliance Industries Limited | Clean Energy vs. Marathon Petroleum Corp | Clean Energy vs. Valero Energy | Clean Energy vs. Phillips 66 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |