Correlation Between Yanzhou Coal and PRINCIPAL FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Yanzhou Coal and PRINCIPAL FINANCIAL 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 PRINCIPAL FINANCIAL 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 PRINCIPAL FINANCIAL, you can compare the effects of market volatilities on Yanzhou Coal and PRINCIPAL FINANCIAL 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 PRINCIPAL FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanzhou Coal and PRINCIPAL FINANCIAL.
Diversification Opportunities for Yanzhou Coal and PRINCIPAL FINANCIAL
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yanzhou and PRINCIPAL is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and PRINCIPAL FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRINCIPAL FINANCIAL 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 PRINCIPAL FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRINCIPAL FINANCIAL has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and PRINCIPAL FINANCIAL go up and down completely randomly.
Pair Corralation between Yanzhou Coal and PRINCIPAL FINANCIAL
Assuming the 90 days horizon Yanzhou Coal Mining is expected to generate 1.62 times more return on investment than PRINCIPAL FINANCIAL. However, Yanzhou Coal is 1.62 times more volatile than PRINCIPAL FINANCIAL. It trades about 0.13 of its potential returns per unit of risk. PRINCIPAL FINANCIAL is currently generating about 0.07 per unit of risk. If you would invest 905.00 in Yanzhou Coal Mining on September 2, 2025 and sell it today you would earn a total of 215.00 from holding Yanzhou Coal Mining or generate 23.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yanzhou Coal Mining vs. PRINCIPAL FINANCIAL
Performance |
| Timeline |
| Yanzhou Coal Mining |
| PRINCIPAL FINANCIAL |
Yanzhou Coal and PRINCIPAL FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanzhou Coal and PRINCIPAL FINANCIAL
The main advantage of trading using opposite Yanzhou Coal and PRINCIPAL FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanzhou Coal position performs unexpectedly, PRINCIPAL FINANCIAL 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 PRINCIPAL FINANCIAL will offset losses from the drop in PRINCIPAL FINANCIAL's long position.| Yanzhou Coal vs. Thai Beverage Public | Yanzhou Coal vs. Molson Coors Beverage | Yanzhou Coal vs. THAI BEVERAGE | Yanzhou Coal vs. GigaMedia |
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Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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