Correlation Between Coffee Holding and Virtu Financial
Can any of the company-specific risk be diversified away by investing in both Coffee Holding and Virtu Financial 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 Holding and Virtu Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coffee Holding Co and Virtu Financial, you can compare the effects of market volatilities on Coffee Holding and Virtu Financial 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 Holding with a short position of Virtu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and Virtu Financial.
Diversification Opportunities for Coffee Holding and Virtu Financial
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coffee and Virtu is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co and Virtu Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtu Financial and Coffee Holding 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 Holding Co are associated (or correlated) with Virtu Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtu Financial has no effect on the direction of Coffee Holding i.e., Coffee Holding and Virtu Financial go up and down completely randomly.
Pair Corralation between Coffee Holding and Virtu Financial
Assuming the 90 days horizon Coffee Holding Co is expected to under-perform the Virtu Financial. In addition to that, Coffee Holding is 2.54 times more volatile than Virtu Financial. It trades about -0.15 of its total potential returns per unit of risk. Virtu Financial is currently generating about -0.06 per unit of volatility. If you would invest 3,460 in Virtu Financial on October 16, 2024 and sell it today you would lose (80.00) from holding Virtu Financial or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Coffee Holding Co vs. Virtu Financial
Performance |
| Timeline |
| Coffee Holding |
| Virtu Financial |
Coffee Holding and Virtu Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and Virtu Financial
The main advantage of trading using opposite Coffee Holding and Virtu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding position performs unexpectedly, Virtu Financial 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 Virtu Financial will offset losses from the drop in Virtu Financial's long position.| Coffee Holding vs. EBRO FOODS | Coffee Holding vs. Astral Foods Limited | Coffee Holding vs. THAI BEVERAGE | Coffee Holding vs. CN MODERN DAIRY |
| Virtu Financial vs. ENVVENO MEDICAL DL 00001 | Virtu Financial vs. OBSERVE MEDICAL ASA | Virtu Financial vs. SOFI TECHNOLOGIES | Virtu Financial vs. Sunny Optical Technology |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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