Correlation Between Yancoal Australia and Mindax
Can any of the company-specific risk be diversified away by investing in both Yancoal Australia and Mindax 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 Yancoal Australia and Mindax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yancoal Australia and Mindax Limited, you can compare the effects of market volatilities on Yancoal Australia and Mindax 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 Yancoal Australia with a short position of Mindax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yancoal Australia and Mindax.
Diversification Opportunities for Yancoal Australia and Mindax
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yancoal and Mindax is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Yancoal Australia and Mindax Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindax Limited and Yancoal Australia 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 Yancoal Australia are associated (or correlated) with Mindax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindax Limited has no effect on the direction of Yancoal Australia i.e., Yancoal Australia and Mindax go up and down completely randomly.
Pair Corralation between Yancoal Australia and Mindax
Assuming the 90 days trading horizon Yancoal Australia is expected to generate 0.37 times more return on investment than Mindax. However, Yancoal Australia is 2.69 times less risky than Mindax. It trades about 0.04 of its potential returns per unit of risk. Mindax Limited is currently generating about 0.01 per unit of risk. If you would invest 456.00 in Yancoal Australia on September 24, 2024 and sell it today you would earn a total of 170.00 from holding Yancoal Australia or generate 37.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Yancoal Australia vs. Mindax Limited
Performance |
Timeline |
Yancoal Australia |
Mindax Limited |
Yancoal Australia and Mindax Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yancoal Australia and Mindax
The main advantage of trading using opposite Yancoal Australia and Mindax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yancoal Australia position performs unexpectedly, Mindax 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 Mindax will offset losses from the drop in Mindax's long position.Yancoal Australia vs. Capitol Health | Yancoal Australia vs. Austco Healthcare | Yancoal Australia vs. Black Rock Mining | Yancoal Australia vs. Global Health |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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