Correlation Between Coffee Holding and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both Coffee Holding and Safestore Holdings 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 Safestore Holdings 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 Safestore Holdings plc, you can compare the effects of market volatilities on Coffee Holding and Safestore Holdings 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 Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and Safestore Holdings.
Diversification Opportunities for Coffee Holding and Safestore Holdings
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coffee and Safestore is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings plc 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 Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of Coffee Holding i.e., Coffee Holding and Safestore Holdings go up and down completely randomly.
Pair Corralation between Coffee Holding and Safestore Holdings
Assuming the 90 days horizon Coffee Holding Co is expected to generate 2.62 times more return on investment than Safestore Holdings. However, Coffee Holding is 2.62 times more volatile than Safestore Holdings plc. It trades about 0.05 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.02 per unit of risk. If you would invest 206.00 in Coffee Holding Co on October 16, 2024 and sell it today you would earn a total of 158.00 from holding Coffee Holding Co or generate 76.7% 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. Safestore Holdings plc
Performance |
| Timeline |
| Coffee Holding |
| Safestore Holdings plc |
Coffee Holding and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and Safestore Holdings
The main advantage of trading using opposite Coffee Holding and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' long position.| Coffee Holding vs. EBRO FOODS | Coffee Holding vs. Astral Foods Limited | Coffee Holding vs. THAI BEVERAGE | Coffee Holding vs. CN MODERN DAIRY |
| Safestore Holdings vs. Grupo Carso SAB | Safestore Holdings vs. GRUPO CARSO A1 | Safestore Holdings vs. Haier Smart Home | Safestore Holdings vs. Darden Restaurants |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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