Correlation Between Coffee Holding and CyberArk Software
Can any of the company-specific risk be diversified away by investing in both Coffee Holding and CyberArk Software 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 CyberArk Software 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 CyberArk Software, you can compare the effects of market volatilities on Coffee Holding and CyberArk Software 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 CyberArk Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and CyberArk Software.
Diversification Opportunities for Coffee Holding and CyberArk Software
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coffee and CyberArk is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software 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 CyberArk Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberArk Software has no effect on the direction of Coffee Holding i.e., Coffee Holding and CyberArk Software go up and down completely randomly.
Pair Corralation between Coffee Holding and CyberArk Software
Assuming the 90 days horizon Coffee Holding Co is expected to generate 2.29 times more return on investment than CyberArk Software. However, Coffee Holding is 2.29 times more volatile than CyberArk Software. It trades about 0.05 of its potential returns per unit of risk. CyberArk Software is currently generating about 0.1 per unit of risk. If you would invest 206.00 in Coffee Holding Co on October 17, 2024 and sell it today you would earn a total of 164.00 from holding Coffee Holding Co or generate 79.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Coffee Holding Co vs. CyberArk Software
Performance |
| Timeline |
| Coffee Holding |
| CyberArk Software |
Coffee Holding and CyberArk Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and CyberArk Software
The main advantage of trading using opposite Coffee Holding and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding position performs unexpectedly, CyberArk Software 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 CyberArk Software will offset losses from the drop in CyberArk Software's long position.| Coffee Holding vs. Cairo Communication SpA | Coffee Holding vs. T MOBILE INCDL 00001 | Coffee Holding vs. Easy Software AG | Coffee Holding vs. Uber Technologies |
| CyberArk Software vs. ETFS Coffee ETC | CyberArk Software vs. United Utilities Group | CyberArk Software vs. Coffee Holding Co | CyberArk Software vs. AM EAGLE OUTFITTERS |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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