Correlation Between Yancoal Australia and Exxaro Resources

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

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

Diversification Opportunities for Yancoal Australia and Exxaro Resources

0.0

Correlation Coefficient

Yancoal Australia  Exxaro Resources

Pay attention - limited upside

The 3 months correlation between Yancoal and Exxaro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Yancoal Australia and Exxaro Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxaro Resources 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 Exxaro Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxaro Resources has no effect on the direction of Yancoal Australia i.e., Yancoal Australia and Exxaro Resources go up and down completely randomly.

Pair Corralation between Yancoal Australia and Exxaro Resources

If you would invest (100.00) in Exxaro Resources Limited on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Exxaro Resources Limited or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Yancoal Australia  vs.  Exxaro Resources Limited

Yancoal Australia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yancoal Australia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Exxaro Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exxaro Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Exxaro Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Yancoal Australia and Exxaro Resources

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

The idea behind Yancoal Australia and Exxaro Resources Limited 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..