Correlation Between Yanzhou Coal and Sysco Corp

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

Diversification Opportunities for Yanzhou Coal and Sysco Corp

-0.46

Correlation Coefficient

Yanzhou Coal  Sysco Corp

Very good diversification

The 3 months correlation between Yanzhou and Sysco is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and Sysco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysco Corp 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 Sysco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysco Corp has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and Sysco Corp go up and down completely randomly.

Pair Corralation between Yanzhou Coal and Sysco Corp

Assuming the 90 days horizon Yanzhou Coal Mining is expected to under-perform the Sysco Corp. In addition to that, Yanzhou Coal is 1.88 times more volatile than Sysco Corp. It trades about -0.19 of its total potential returns per unit of risk. Sysco Corp is currently generating about 0.05 per unit of volatility. If you would invest  6,849  in Sysco Corp on October 23, 2024 and sell it today you would earn a total of  214.00  from holding Sysco Corp or generate 3.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Yanzhou Coal Mining  vs.  Sysco Corp

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.

Sysco Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sysco Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Sysco Corp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Yanzhou Coal and Sysco Corp

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

The idea behind Yanzhou Coal Mining and Sysco Corp 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.