Correlation Between Coffee Holding and MPH Health
Can any of the company-specific risk be diversified away by investing in both Coffee Holding and MPH Health 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 MPH Health 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 MPH Health Care, you can compare the effects of market volatilities on Coffee Holding and MPH Health 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 MPH Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and MPH Health.
Diversification Opportunities for Coffee Holding and MPH Health
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coffee and MPH is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co and MPH Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPH Health Care 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 MPH Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPH Health Care has no effect on the direction of Coffee Holding i.e., Coffee Holding and MPH Health go up and down completely randomly.
Pair Corralation between Coffee Holding and MPH Health
Assuming the 90 days horizon Coffee Holding Co is expected to generate 2.04 times more return on investment than MPH Health. However, Coffee Holding is 2.04 times more volatile than MPH Health Care. It trades about 0.04 of its potential returns per unit of risk. MPH Health Care is currently generating about 0.04 per unit of risk. If you would invest 202.00 in Coffee Holding Co on November 1, 2024 and sell it today you would earn a total of 138.00 from holding Coffee Holding Co or generate 68.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coffee Holding Co vs. MPH Health Care
Performance |
| Timeline |
| Coffee Holding |
| MPH Health Care |
Coffee Holding and MPH Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and MPH Health
The main advantage of trading using opposite Coffee Holding and MPH Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding position performs unexpectedly, MPH Health 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 MPH Health will offset losses from the drop in MPH Health's long position.| Coffee Holding vs. FANDIFI TECHNOLOGY P | Coffee Holding vs. TOMBADOR IRON LTD | Coffee Holding vs. UPDATE SOFTWARE | Coffee Holding vs. The Japan Steel |
| MPH Health vs. ANGANG STEEL H | MPH Health vs. Khiron Life Sciences | MPH Health vs. ULTRA CLEAN HLDGS | MPH Health vs. Coffee Holding Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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