Correlation Between Bt Brands and Coffee Holding
Can any of the company-specific risk be diversified away by investing in both Bt Brands and Coffee Holding 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 Bt Brands and Coffee Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bt Brands and Coffee Holding Co, you can compare the effects of market volatilities on Bt Brands and Coffee Holding 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 Bt Brands with a short position of Coffee Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bt Brands and Coffee Holding.
Diversification Opportunities for Bt Brands and Coffee Holding
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between BTBD and Coffee is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and Coffee Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coffee Holding and Bt Brands 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 Bt Brands are associated (or correlated) with Coffee Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coffee Holding has no effect on the direction of Bt Brands i.e., Bt Brands and Coffee Holding go up and down completely randomly.
Pair Corralation between Bt Brands and Coffee Holding
Given the investment horizon of 90 days Bt Brands is expected to generate 1.09 times less return on investment than Coffee Holding. In addition to that, Bt Brands is 1.26 times more volatile than Coffee Holding Co. It trades about 0.03 of its total potential returns per unit of risk. Coffee Holding Co is currently generating about 0.04 per unit of volatility. If you would invest 270.00 in Coffee Holding Co on October 24, 2024 and sell it today you would earn a total of 110.00 from holding Coffee Holding Co or generate 40.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bt Brands vs. Coffee Holding Co
Performance |
| Timeline |
| Bt Brands |
| Coffee Holding |
Bt Brands and Coffee Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bt Brands and Coffee Holding
The main advantage of trading using opposite Bt Brands and Coffee Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bt Brands position performs unexpectedly, Coffee Holding 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 Coffee Holding will offset losses from the drop in Coffee Holding's long position.| Bt Brands vs. Alsea SAB de | Bt Brands vs. Marstons PLC | Bt Brands vs. Bagger Daves Burger | Bt Brands vs. Marstons PLC |
| Coffee Holding vs. Seneca Foods Corp | Coffee Holding vs. J J Snack | Coffee Holding vs. Aryzta AG PK | Coffee Holding vs. Lifeway Foods |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |