Correlation Between Coffee Holding and Grand Canyon
Can any of the company-specific risk be diversified away by investing in both Coffee Holding and Grand Canyon 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 Grand Canyon 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 Grand Canyon Education, you can compare the effects of market volatilities on Coffee Holding and Grand Canyon 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 Grand Canyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and Grand Canyon.
Diversification Opportunities for Coffee Holding and Grand Canyon
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Coffee and Grand is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education 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 Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of Coffee Holding i.e., Coffee Holding and Grand Canyon go up and down completely randomly.
Pair Corralation between Coffee Holding and Grand Canyon
Assuming the 90 days horizon Coffee Holding is expected to generate 1.17 times less return on investment than Grand Canyon. In addition to that, Coffee Holding is 1.76 times more volatile than Grand Canyon Education. It trades about 0.1 of its total potential returns per unit of risk. Grand Canyon Education is currently generating about 0.2 per unit of volatility. If you would invest 12,300 in Grand Canyon Education on October 26, 2024 and sell it today you would earn a total of 4,000 from holding Grand Canyon Education or generate 32.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coffee Holding Co vs. Grand Canyon Education
Performance |
| Timeline |
| Coffee Holding |
| Grand Canyon Education |
Coffee Holding and Grand Canyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and Grand Canyon
The main advantage of trading using opposite Coffee Holding and Grand Canyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding position performs unexpectedly, Grand Canyon 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 Grand Canyon will offset losses from the drop in Grand Canyon's long position.| Coffee Holding vs. Highlight Communications AG | Coffee Holding vs. MAGNUM MINING EXP | Coffee Holding vs. Zijin Mining Group | Coffee Holding vs. Harmony Gold Mining |
| Grand Canyon vs. De Grey Mining | Grand Canyon vs. CHAMPION IRON | Grand Canyon vs. Stag Industrial | Grand Canyon vs. SIEM OFFSHORE NEW |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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