Correlation Between YANZHOU COAL and American Eagle
Can any of the company-specific risk be diversified away by investing in both YANZHOU COAL and American Eagle 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 American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YANZHOU L H and American Eagle Outfitters, you can compare the effects of market volatilities on YANZHOU COAL and American Eagle 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 American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of YANZHOU COAL and American Eagle.
Diversification Opportunities for YANZHOU COAL and American Eagle
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between YANZHOU and American is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding YANZHOU L H and American Eagle Outfitters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Eagle Outfitters 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 L H are associated (or correlated) with American Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Eagle Outfitters has no effect on the direction of YANZHOU COAL i.e., YANZHOU COAL and American Eagle go up and down completely randomly.
Pair Corralation between YANZHOU COAL and American Eagle
Assuming the 90 days trading horizon YANZHOU L H is expected to generate 1.47 times more return on investment than American Eagle. However, YANZHOU COAL is 1.47 times more volatile than American Eagle Outfitters. It trades about -0.05 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.54 per unit of risk. If you would invest 103.00 in YANZHOU L H on November 29, 2024 and sell it today you would lose (4.00) from holding YANZHOU L H or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YANZHOU L H vs. American Eagle Outfitters
Performance |
| Timeline |
| YANZHOU COAL |
| American Eagle Outfitters |
YANZHOU COAL and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YANZHOU COAL and American Eagle
The main advantage of trading using opposite YANZHOU COAL and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YANZHOU COAL position performs unexpectedly, American Eagle 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 American Eagle will offset losses from the drop in American Eagle's long position.| YANZHOU COAL vs. ROYAL ROAD MIN | YANZHOU COAL vs. GEELY AUTOMOBILE | YANZHOU COAL vs. SmarTone Telecommunications Holdings | YANZHOU COAL vs. Mobilezone Holding AG |
| American Eagle vs. Warner Music Group | American Eagle vs. UNIVERSAL MUSIC GROUP | American Eagle vs. alstria office REIT AG | American Eagle vs. GEELY AUTOMOBILE |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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