Correlation Between Yanzhou Coal and CARSALES
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and CARSALES 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 CARSALES 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 CARSALESCOM, you can compare the effects of market volatilities on Yanzhou Coal and CARSALES 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 CARSALES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and CARSALES.
Diversification Opportunities for Yanzhou Coal and CARSALES
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yanzhou and CARSALES is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and CARSALESCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARSALESCOM 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 CARSALES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARSALESCOM has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and CARSALES go up and down completely randomly.
Pair Corralation between Yanzhou Coal and CARSALES
Assuming the 90 days horizon Yanzhou Coal is expected to generate 1.43 times less return on investment than CARSALES. In addition to that, Yanzhou Coal is 2.34 times more volatile than CARSALESCOM. It trades about 0.02 of its total potential returns per unit of risk. CARSALESCOM is currently generating about 0.07 per unit of volatility. If you would invest 1,347 in CARSALESCOM on October 23, 2024 and sell it today you would earn a total of 953.00 from holding CARSALESCOM or generate 70.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. CARSALESCOM
Performance |
| Timeline |
| Yanzhou Coal Mining |
| CARSALESCOM |
Yanzhou Coal and CARSALES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and CARSALES
The main advantage of trading using opposite Yanzhou Coal and CARSALES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, CARSALES 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 CARSALES will offset losses from the drop in CARSALES's long position.| Yanzhou Coal vs. ATRESMEDIA | Yanzhou Coal vs. CNVISION MEDIA | Yanzhou Coal vs. SK TELECOM TDADR | Yanzhou Coal vs. Citic Telecom International |
| CARSALES vs. UNIQA INSURANCE GR | CARSALES vs. Virtu Financial | CARSALES vs. Yanzhou Coal Mining | CARSALES vs. PNC Financial Services |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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