Correlation Between Coffee Day and Golden Tobacco

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Coffee Day and Golden Tobacco 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 Coffee Day and Golden Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coffee Day Enterprises and Golden Tobacco Limited, you can compare the effects of market volatilities on Coffee Day and Golden Tobacco 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 Coffee Day with a short position of Golden Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Day and Golden Tobacco.

Diversification Opportunities for Coffee Day and Golden Tobacco

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Coffee and Golden is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Day Enterprises and Golden Tobacco Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Tobacco and Coffee Day 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 Coffee Day Enterprises are associated (or correlated) with Golden Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Tobacco has no effect on the direction of Coffee Day i.e., Coffee Day and Golden Tobacco go up and down completely randomly.

Pair Corralation between Coffee Day and Golden Tobacco

Assuming the 90 days trading horizon Coffee Day Enterprises is expected to generate 1.31 times more return on investment than Golden Tobacco. However, Coffee Day is 1.31 times more volatile than Golden Tobacco Limited. It trades about 0.2 of its potential returns per unit of risk. Golden Tobacco Limited is currently generating about -0.14 per unit of risk. If you would invest  2,508  in Coffee Day Enterprises on October 16, 2024 and sell it today you would earn a total of  368.00  from holding Coffee Day Enterprises or generate 14.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Coffee Day Enterprises  vs.  Golden Tobacco Limited

 Performance 
       Timeline  
Coffee Day Enterprises 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Coffee Day Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Golden Tobacco 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Golden Tobacco Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Coffee Day and Golden Tobacco Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coffee Day and Golden Tobacco

The main advantage of trading using opposite Coffee Day and Golden Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Day position performs unexpectedly, Golden Tobacco 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 Golden Tobacco will offset losses from the drop in Golden Tobacco's long position.
Coffee Day vs. Avonmore Capital Management
Coffee Day vs. Agarwal Industrial
Coffee Day vs. Manaksia Coated Metals
Coffee Day vs. Hisar Metal Industries
The idea behind Coffee Day Enterprises and Golden Tobacco Limited 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.
Golden Tobacco vs. BF Investment Limited
Golden Tobacco vs. Network18 Media Investments
Golden Tobacco vs. Tube Investments of
Golden Tobacco vs. Cholamandalam Investment and
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 Commodity Directory module to find actively traded commodities issued by global exchanges.

Other Complementary Tools

Share Portfolio
Track or share privately all of your investments from the convenience of any device
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY