Correlation Between STORE ELECTRONIC and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC 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 STORE ELECTRONIC and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and Yanzhou Coal Mining, you can compare the effects of market volatilities on STORE ELECTRONIC 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 STORE ELECTRONIC with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and Yanzhou Coal.
Diversification Opportunities for STORE ELECTRONIC and Yanzhou Coal
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between STORE and Yanzhou is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC i.e., STORE ELECTRONIC and Yanzhou Coal go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and Yanzhou Coal
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 1.38 times more return on investment than Yanzhou Coal. However, STORE ELECTRONIC is 1.38 times more volatile than Yanzhou Coal Mining. It trades about 0.23 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.08 per unit of risk. If you would invest 13,750 in STORE ELECTRONIC on September 26, 2024 and sell it today you would earn a total of 2,250 from holding STORE ELECTRONIC or generate 16.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
STORE ELECTRONIC vs. Yanzhou Coal Mining
Performance |
Timeline |
STORE ELECTRONIC |
Yanzhou Coal Mining |
STORE ELECTRONIC and Yanzhou Coal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with STORE ELECTRONIC and Yanzhou Coal
The main advantage of trading using opposite STORE ELECTRONIC and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC 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.STORE ELECTRONIC vs. GRIFFIN MINING LTD | STORE ELECTRONIC vs. DAIRY FARM INTL | STORE ELECTRONIC vs. ALEFARM BREWING DK 05 | STORE ELECTRONIC vs. Hanison Construction Holdings |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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