Correlation Between MHP Hotel and ETFS Coffee
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By analyzing existing cross correlation between MHP Hotel AG and ETFS Coffee ETC, you can compare the effects of market volatilities on MHP Hotel and ETFS Coffee 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 MHP Hotel with a short position of ETFS Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of MHP Hotel and ETFS Coffee.
Diversification Opportunities for MHP Hotel and ETFS Coffee
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between MHP and ETFS is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding MHP Hotel AG and ETFS Coffee ETC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Coffee ETC and MHP Hotel 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 MHP Hotel AG are associated (or correlated) with ETFS Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Coffee ETC has no effect on the direction of MHP Hotel i.e., MHP Hotel and ETFS Coffee go up and down completely randomly.
Pair Corralation between MHP Hotel and ETFS Coffee
Assuming the 90 days trading horizon MHP Hotel is expected to generate 4.82 times less return on investment than ETFS Coffee. In addition to that, MHP Hotel is 1.44 times more volatile than ETFS Coffee ETC. It trades about 0.1 of its total potential returns per unit of risk. ETFS Coffee ETC is currently generating about 0.67 per unit of volatility. If you would invest 3,796 in ETFS Coffee ETC on September 2, 2024 and sell it today you would earn a total of 1,463 from holding ETFS Coffee ETC or generate 38.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
MHP Hotel AG vs. ETFS Coffee ETC
Performance |
| Timeline |
| MHP Hotel AG |
| ETFS Coffee ETC |
MHP Hotel and ETFS Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MHP Hotel and ETFS Coffee
The main advantage of trading using opposite MHP Hotel and ETFS Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MHP Hotel position performs unexpectedly, ETFS Coffee 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 ETFS Coffee will offset losses from the drop in ETFS Coffee's long position.| MHP Hotel vs. LODESTAR MIN | MHP Hotel vs. Impinj Inc | MHP Hotel vs. Impinj Inc | MHP Hotel vs. Superior Plus Corp |
| ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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