Correlation Between Yancoal Australia and MoneyMe

Can any of the company-specific risk be diversified away by investing in both Yancoal Australia and MoneyMe 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 MoneyMe into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yancoal Australia and MoneyMe, you can compare the effects of market volatilities on Yancoal Australia and MoneyMe 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 MoneyMe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yancoal Australia and MoneyMe.

Diversification Opportunities for Yancoal Australia and MoneyMe

0.02

Correlation Coefficient

Yancoal Australia  MoneyMe

Significant diversification

The 3 months correlation between Yancoal and MoneyMe is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Yancoal Australia and MoneyMe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyMe 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 MoneyMe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneyMe has no effect on the direction of Yancoal Australia i.e., Yancoal Australia and MoneyMe go up and down completely randomly.

Pair Corralation between Yancoal Australia and MoneyMe

Assuming the 90 days trading horizon Yancoal Australia is expected to generate 3.42 times less return on investment than MoneyMe. But when comparing it to its historical volatility, Yancoal Australia is 3.55 times less risky than MoneyMe. It trades about 0.1 of its potential returns per unit of risk. MoneyMe is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  13.00  in MoneyMe on September 23, 2024 and sell it today you would earn a total of  4.00  from holding MoneyMe or generate 30.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Yancoal Australia  vs.  MoneyMe

Yancoal Australia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yancoal Australia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Yancoal Australia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MoneyMe

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MoneyMe are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, MoneyMe unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yancoal Australia and MoneyMe

The main advantage of trading using opposite Yancoal Australia and MoneyMe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yancoal Australia position performs unexpectedly, MoneyMe 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 MoneyMe will offset losses from the drop in MoneyMe's long position.

The idea behind Yancoal Australia and MoneyMe pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.