Correlation Between AGRICULTBK HADR25 and ETFS Coffee
Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR25 and ETFS Coffee 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 AGRICULTBK HADR25 and ETFS Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICULTBK HADR25 YC and ETFS Coffee ETC, you can compare the effects of market volatilities on AGRICULTBK HADR25 and ETFS Coffee 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 AGRICULTBK HADR25 with a short position of ETFS Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR25 and ETFS Coffee.
Diversification Opportunities for AGRICULTBK HADR25 and ETFS Coffee
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AGRICULTBK and ETFS is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and ETFS Coffee ETC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Coffee ETC and AGRICULTBK HADR25 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 AGRICULTBK HADR25 YC are associated (or correlated) with ETFS Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Coffee ETC has no effect on the direction of AGRICULTBK HADR25 i.e., AGRICULTBK HADR25 and ETFS Coffee go up and down completely randomly.
Pair Corralation between AGRICULTBK HADR25 and ETFS Coffee
Assuming the 90 days trading horizon AGRICULTBK HADR25 YC is expected to generate 1.31 times more return on investment than ETFS Coffee. However, AGRICULTBK HADR25 is 1.31 times more volatile than ETFS Coffee ETC. It trades about 0.37 of its potential returns per unit of risk. ETFS Coffee ETC is currently generating about 0.02 per unit of risk. If you would invest 1,171 in AGRICULTBK HADR25 YC on October 12, 2024 and sell it today you would earn a total of 179.00 from holding AGRICULTBK HADR25 YC or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 88.24% |
| Values | Daily Returns |
AGRICULTBK HADR25 YC vs. ETFS Coffee ETC
Performance |
| Timeline |
| AGRICULTBK HADR25 |
| ETFS Coffee ETC |
AGRICULTBK HADR25 and ETFS Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICULTBK HADR25 and ETFS Coffee
The main advantage of trading using opposite AGRICULTBK HADR25 and ETFS Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR25 position performs unexpectedly, ETFS Coffee 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 ETFS Coffee will offset losses from the drop in ETFS Coffee's long position.| AGRICULTBK HADR25 vs. VULCAN MATERIALS | AGRICULTBK HADR25 vs. Electronic Arts | AGRICULTBK HADR25 vs. Nucletron Electronic Aktiengesellschaft | AGRICULTBK HADR25 vs. STORE ELECTRONIC |
| ETFS Coffee vs. Clean Energy Fuels | ETFS Coffee vs. CALTAGIRONE EDITORE | ETFS Coffee vs. United States Steel | ETFS Coffee vs. Ultra Clean Holdings |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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