Correlation Between Figaro Coffee and Cosco Capital
Can any of the company-specific risk be diversified away by investing in both Figaro Coffee and Cosco Capital 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 Figaro Coffee and Cosco Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figaro Coffee Group and Cosco Capital, you can compare the effects of market volatilities on Figaro Coffee and Cosco Capital 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 Figaro Coffee with a short position of Cosco Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figaro Coffee and Cosco Capital.
Diversification Opportunities for Figaro Coffee and Cosco Capital
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Figaro and Cosco is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Figaro Coffee Group and Cosco Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosco Capital and Figaro Coffee 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 Figaro Coffee Group are associated (or correlated) with Cosco Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosco Capital has no effect on the direction of Figaro Coffee i.e., Figaro Coffee and Cosco Capital go up and down completely randomly.
Pair Corralation between Figaro Coffee and Cosco Capital
Assuming the 90 days trading horizon Figaro Coffee Group is expected to generate 1.53 times more return on investment than Cosco Capital. However, Figaro Coffee is 1.53 times more volatile than Cosco Capital. It trades about -0.01 of its potential returns per unit of risk. Cosco Capital is currently generating about -0.08 per unit of risk. If you would invest 85.00 in Figaro Coffee Group on September 4, 2024 and sell it today you would lose (1.00) from holding Figaro Coffee Group or give up 1.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Figaro Coffee Group vs. Cosco Capital
Performance |
| Timeline |
| Figaro Coffee Group |
| Cosco Capital |
Figaro Coffee and Cosco Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figaro Coffee and Cosco Capital
The main advantage of trading using opposite Figaro Coffee and Cosco Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figaro Coffee position performs unexpectedly, Cosco Capital 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 Cosco Capital will offset losses from the drop in Cosco Capital's long position.| Figaro Coffee vs. Semirara Mining Corp | Figaro Coffee vs. Apex Mining Co | Figaro Coffee vs. Atlas Consolidated Mining | Figaro Coffee vs. Bank of the |
| Cosco Capital vs. Rizal Commercial Banking | Cosco Capital vs. STI Education Systems | Cosco Capital vs. Integrated Micro Electronics | Cosco Capital vs. Sun Life Financial |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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