Correlation Between Yanzhou Coal and CSL

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

Diversification Opportunities for Yanzhou Coal and CSL

0.43

Correlation Coefficient

Yanzhou Coal  CSL

Very weak diversification

The 3 months correlation between Yanzhou and CSL is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Yanzhou Coal Mining and CSL LTD SPONADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL LTD SPONADR 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL LTD SPONADR has no effect on the direction of Yanzhou Coal i.e., Yanzhou Coal and CSL go up and down completely randomly.

Pair Corralation between Yanzhou Coal and CSL

Assuming the 90 days horizon Yanzhou Coal Mining is expected to generate 1.58 times more return on investment than CSL. However, Yanzhou Coal is 1.58 times more volatile than CSL LTD SPONADR. It trades about 0.08 of its potential returns per unit of risk. CSL LTD SPONADR is currently generating about 0.09 per unit of risk. If you would invest  794.00  in Yanzhou Coal Mining on April 22, 2025 and sell it today you would earn a total of  86.00  from holding Yanzhou Coal Mining or generate 10.83% 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.  CSL LTD SPONADR

Yanzhou Coal Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Yanzhou Coal Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Yanzhou Coal may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CSL LTD SPONADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CSL LTD SPONADR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, CSL may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Yanzhou Coal and CSL

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

The idea behind Yanzhou Coal Mining and CSL LTD SPONADR 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.