Correlation Between Coffee Holding and Corning Incorporated
Can any of the company-specific risk be diversified away by investing in both Coffee Holding and Corning Incorporated 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 Corning Incorporated 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 Corning Incorporated, you can compare the effects of market volatilities on Coffee Holding and Corning Incorporated 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 Corning Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and Corning Incorporated.
Diversification Opportunities for Coffee Holding and Corning Incorporated
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Coffee and Corning is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated 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 Corning Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corning Incorporated has no effect on the direction of Coffee Holding i.e., Coffee Holding and Corning Incorporated go up and down completely randomly.
Pair Corralation between Coffee Holding and Corning Incorporated
Assuming the 90 days horizon Coffee Holding is expected to generate 2.85 times less return on investment than Corning Incorporated. In addition to that, Coffee Holding is 4.2 times more volatile than Corning Incorporated. It trades about 0.03 of its total potential returns per unit of risk. Corning Incorporated is currently generating about 0.35 per unit of volatility. If you would invest 4,527 in Corning Incorporated on October 24, 2024 and sell it today you would earn a total of 292.00 from holding Corning Incorporated or generate 6.45% 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. Corning Incorporated
Performance |
| Timeline |
| Coffee Holding |
| Corning Incorporated |
Coffee Holding and Corning Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and Corning Incorporated
The main advantage of trading using opposite Coffee Holding and Corning Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding position performs unexpectedly, Corning Incorporated 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 Corning Incorporated will offset losses from the drop in Corning Incorporated's long position.| Coffee Holding vs. Grupo Carso SAB | Coffee Holding vs. Retail Estates NV | Coffee Holding vs. Cars Inc | Coffee Holding vs. PICKN PAY STORES |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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