Correlation Between Yanzhou Coal and ALBIS LEASING

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

By analyzing existing cross correlation between Yanzhou Coal Mining and ALBIS LEASING AG, you can compare the effects of market volatilities on Yanzhou Coal and ALBIS LEASING 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 Yanzhou Coal with a short position of ALBIS LEASING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and ALBIS LEASING.

Diversification Opportunities for Yanzhou Coal and ALBIS LEASING

-0.27

Correlation Coefficient

Yanzhou Coal  ALBIS LEASING

Very good diversification

The 3 months correlation between Yanzhou and ALBIS is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and ALBIS LEASING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALBIS LEASING AG and Yanzhou Coal 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 Yanzhou Coal Mining are associated (or correlated) with ALBIS LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALBIS LEASING AG has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and ALBIS LEASING go up and down completely randomly.

Pair Corralation between Yanzhou Coal and ALBIS LEASING

Assuming the 90 days horizon Yanzhou Coal Mining is expected to under-perform the ALBIS LEASING. In addition to that, Yanzhou Coal is 4.76 times more volatile than ALBIS LEASING AG. It trades about -0.13 of its total potential returns per unit of risk. ALBIS LEASING AG is currently generating about 0.02 per unit of volatility. If you would invest  272.00  in ALBIS LEASING AG on October 8, 2024 and sell it today you would earn a total of  2.00  from holding ALBIS LEASING AG or generate 0.74% return on investment over 90 days.

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

Yanzhou Coal Mining  vs.  ALBIS LEASING AG

Yanzhou Coal Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

ALBIS LEASING AG

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALBIS LEASING AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, ALBIS LEASING is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Yanzhou Coal and ALBIS LEASING

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

The idea behind Yanzhou Coal Mining and ALBIS LEASING AG 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.