Correlation Between Fidelity National and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both Fidelity National and Yanzhou Coal 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 Fidelity National and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Information and Yanzhou Coal Mining, you can compare the effects of market volatilities on Fidelity National and Yanzhou Coal 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 Fidelity National with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Yanzhou Coal.
Diversification Opportunities for Fidelity National and Yanzhou Coal
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Yanzhou is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Yanzhou Coal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yanzhou Coal Mining and Fidelity National 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 Fidelity National Information are associated (or correlated) with Yanzhou Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yanzhou Coal Mining has no effect on the direction of Fidelity National i.e., Fidelity National and Yanzhou Coal go up and down completely randomly.
Pair Corralation between Fidelity National and Yanzhou Coal
Assuming the 90 days trading horizon Fidelity National Information is expected to generate 0.43 times more return on investment than Yanzhou Coal. However, Fidelity National Information is 2.31 times less risky than Yanzhou Coal. It trades about -0.17 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.24 per unit of risk. If you would invest 7,768 in Fidelity National Information on October 24, 2024 and sell it today you would lose (193.00) from holding Fidelity National Information or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. Yanzhou Coal Mining
Performance |
| Timeline |
| Fidelity National |
| Yanzhou Coal Mining |
Fidelity National and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Yanzhou Coal
The main advantage of trading using opposite Fidelity National and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, Yanzhou Coal 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 Yanzhou Coal will offset losses from the drop in Yanzhou Coal's long position.| Fidelity National vs. Yanzhou Coal Mining | Fidelity National vs. Globex Mining Enterprises | Fidelity National vs. United Rentals | Fidelity National vs. Monument Mining Limited |
| Yanzhou Coal vs. Summit Materials | Yanzhou Coal vs. GRENKELEASING Dusseldorf | Yanzhou Coal vs. APPLIED MATERIALS | Yanzhou Coal vs. Sixt Leasing SE |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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