Correlation Between Yanzhou Coal and New HopeLimited
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and New HopeLimited 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 New HopeLimited 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 New Hope, you can compare the effects of market volatilities on Yanzhou Coal and New HopeLimited 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 New HopeLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and New HopeLimited.
Diversification Opportunities for Yanzhou Coal and New HopeLimited
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yanzhou and New is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and New Hope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New HopeLimited 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 New HopeLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New HopeLimited has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and New HopeLimited go up and down completely randomly.
Pair Corralation between Yanzhou Coal and New HopeLimited
Assuming the 90 days trading horizon Yanzhou Coal Mining is expected to generate 1.37 times more return on investment than New HopeLimited. However, Yanzhou Coal is 1.37 times more volatile than New Hope. It trades about 0.03 of its potential returns per unit of risk. New Hope is currently generating about 0.02 per unit of risk. If you would invest 95.00 in Yanzhou Coal Mining on September 4, 2024 and sell it today you would earn a total of 12.00 from holding Yanzhou Coal Mining or generate 12.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. New Hope
Performance |
| Timeline |
| Yanzhou Coal Mining |
| New HopeLimited |
Yanzhou Coal and New HopeLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and New HopeLimited
The main advantage of trading using opposite Yanzhou Coal and New HopeLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, New HopeLimited 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 New HopeLimited will offset losses from the drop in New HopeLimited's long position.| Yanzhou Coal vs. AECOM TECHNOLOGY | Yanzhou Coal vs. Consolidated Communications Holdings | Yanzhou Coal vs. Wayside Technology Group | Yanzhou Coal vs. MACOM Technology Solutions |
| New HopeLimited vs. Universal Insurance Holdings | New HopeLimited vs. HANOVER INSURANCE | New HopeLimited vs. CompuGroup Medical SE | New HopeLimited 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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