Cocoa Commodity Alpha and Beta Analysis
| CCUSD Commodity | 9,134 102.00 1.10% |
This module allows you to check different measures of market premium (i.e., alpha and beta) for all equities such as Cocoa. It also helps investors analyze the systematic and unsystematic risks associated with investing in Cocoa over a specified time horizon. Remember, high Cocoa's alpha is almost always a sign of good performance; however, a high beta will depend on investors' risk tolerance level and may signal increased volatility and potential future overvaluation. Key technical indicators related to Cocoa's market risk premium analysis include:
Beta 0.13 | Alpha 0.23 | Risk 3.22 | Sharpe Ratio 0.11 | Expected Return 0.34 |
Alpha is a measure of relative performance on a risk-adjusted basis, while beta measures volatility against the benchmark. The goal is to know if an investor is being compensated for the volatility risk taken. The return on investment might be better than its reference but still not compensate for the assumption of the risk.
Cocoa |
Cocoa Market Premiums
Investors always prefer to have the highest possible return on investment, coupled with the lowest possible volatility. Cocoa market risk premium is the additional return an investor will receive from holding Cocoa long position in a well-diversified portfolio. The market premium is part of the Capital Asset Pricing Model (CAPM), which most analysts and investors use to calculate the acceptable rate of return on investment in Cocoa. At the center of the CAPM is the concept of risk and reward, which is usually communicated by investors using alpha and beta measures. Alpha and beta are two of the key measurements used to evaluate Cocoa's performance over market.| α | 0.23 | β | 0.13 |
Cocoa Return and Market Media
The median price of Cocoa for the period between Thu, Aug 29, 2024 and Wed, Nov 27, 2024 is 7615.0 with a coefficient of variation of 7.4. The daily time series for the period is distributed with a sample standard deviation of 563.65, arithmetic mean of 7616.53, and mean deviation of 435.3. The Commodity did not receive any noticable media coverage during the period. Price Growth (%) |
| Timeline |
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Cocoa in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Cocoa's short interest history, or implied volatility extrapolated from Cocoa options trading.