Correlation Between Yanzhou Coal and Yamaha
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and Yamaha 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 Yamaha 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 Yamaha Motor Co, you can compare the effects of market volatilities on Yanzhou Coal and Yamaha 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 Yamaha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and Yamaha.
Diversification Opportunities for Yanzhou Coal and Yamaha
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yanzhou and Yamaha is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and Yamaha Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yamaha Motor 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 Yamaha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yamaha Motor has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and Yamaha go up and down completely randomly.
Pair Corralation between Yanzhou Coal and Yamaha
Assuming the 90 days horizon Yanzhou Coal Mining is expected to under-perform the Yamaha. But the otc stock apears to be less risky and, when comparing its historical volatility, Yanzhou Coal Mining is 2.02 times less risky than Yamaha. The otc stock trades about -0.11 of its potential returns per unit of risk. The Yamaha Motor Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 846.00 in Yamaha Motor Co on November 28, 2024 and sell it today you would lose (26.00) from holding Yamaha Motor Co or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. Yamaha Motor Co
Performance |
| Timeline |
| Yanzhou Coal Mining |
| Yamaha Motor |
Yanzhou Coal and Yamaha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and Yamaha
The main advantage of trading using opposite Yanzhou Coal and Yamaha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, Yamaha 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 Yamaha will offset losses from the drop in Yamaha's long position.| Yanzhou Coal vs. Indo Tambangraya Megah | Yanzhou Coal vs. Bukit Asam Tbk | Yanzhou Coal vs. Geo Energy Resources | Yanzhou Coal vs. Yancoal Australia |
| Yamaha vs. Isuzu Motors | Yamaha vs. Renault SA | Yamaha vs. Mazda Motor Corp | Yamaha vs. Bayerische Motoren Werke |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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