Correlation Between Coffee Holding and Eskay Mining
Can any of the company-specific risk be diversified away by investing in both Coffee Holding and Eskay Mining 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 Eskay Mining 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 Eskay Mining Corp, you can compare the effects of market volatilities on Coffee Holding and Eskay Mining 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 Eskay Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and Eskay Mining.
Diversification Opportunities for Coffee Holding and Eskay Mining
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coffee and Eskay is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co and Eskay Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eskay Mining Corp 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 Eskay Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eskay Mining Corp has no effect on the direction of Coffee Holding i.e., Coffee Holding and Eskay Mining go up and down completely randomly.
Pair Corralation between Coffee Holding and Eskay Mining
Assuming the 90 days horizon Coffee Holding Co is expected to generate 0.96 times more return on investment than Eskay Mining. However, Coffee Holding Co is 1.04 times less risky than Eskay Mining. It trades about 0.02 of its potential returns per unit of risk. Eskay Mining Corp is currently generating about 0.02 per unit of risk. If you would invest 376.00 in Coffee Holding Co on November 7, 2024 and sell it today you would earn a total of 2.00 from holding Coffee Holding Co or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coffee Holding Co vs. Eskay Mining Corp
Performance |
| Timeline |
| Coffee Holding |
| Eskay Mining Corp |
Coffee Holding and Eskay Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and Eskay Mining
The main advantage of trading using opposite Coffee Holding and Eskay Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding position performs unexpectedly, Eskay Mining 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 Eskay Mining will offset losses from the drop in Eskay Mining's long position.| Coffee Holding vs. Beta Systems Software | Coffee Holding vs. Cal Maine Foods | Coffee Holding vs. Alfa Financial Software | Coffee Holding vs. United Natural Foods |
| Eskay Mining vs. CSSC Offshore Marine | Eskay Mining vs. Calibre Mining Corp | Eskay Mining vs. United Utilities Group | Eskay Mining vs. Algonquin Power Utilities |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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