Correlation Between Yanzhou Coal and Insurance Australia

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Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and Insurance Australia 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 Insurance Australia 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 Insurance Australia Group, you can compare the effects of market volatilities on Yanzhou Coal and Insurance Australia 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 Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and Insurance Australia.

Diversification Opportunities for Yanzhou Coal and Insurance Australia

YanzhouInsuranceDiversified AwayYanzhouInsuranceDiversified Away100%
-0.81
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Yanzhou and Insurance is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia 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 Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and Insurance Australia go up and down completely randomly.

Pair Corralation between Yanzhou Coal and Insurance Australia

Assuming the 90 days horizon Yanzhou Coal Mining is expected to under-perform the Insurance Australia. In addition to that, Yanzhou Coal is 1.12 times more volatile than Insurance Australia Group. It trades about -0.13 of its total potential returns per unit of risk. Insurance Australia Group is currently generating about 0.17 per unit of volatility. If you would invest  444.00  in Insurance Australia Group on October 31, 2024 and sell it today you would earn a total of  81.00  from holding Insurance Australia Group or generate 18.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Yanzhou Coal Mining  vs.  Insurance Australia Group

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -20-15-10-50510
JavaScript chart by amCharts 3.21.15YZC NRM
       Timeline  
Yanzhou Coal Mining 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1010.51111.512
Insurance Australia 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Insurance Australia Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Insurance Australia reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan4.44.54.64.74.84.955.15.2

Yanzhou Coal and Insurance Australia Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.39-2.54-1.69-0.840.01240.741.492.232.97 0.060.080.100.12
JavaScript chart by amCharts 3.21.15YZC NRM
       Returns  

Pair Trading with Yanzhou Coal and Insurance Australia

The main advantage of trading using opposite Yanzhou Coal and Insurance Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, Insurance Australia 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 Insurance Australia will offset losses from the drop in Insurance Australia's long position.
The idea behind Yanzhou Coal Mining and Insurance Australia Group 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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