Correlation Between REVO INSURANCE and ETFS Coffee
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE 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 REVO INSURANCE and ETFS Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and ETFS Coffee ETC, you can compare the effects of market volatilities on REVO INSURANCE 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 REVO INSURANCE with a short position of ETFS Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and ETFS Coffee.
Diversification Opportunities for REVO INSURANCE and ETFS Coffee
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between REVO and ETFS is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA 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 REVO INSURANCE 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 REVO INSURANCE SPA 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 REVO INSURANCE i.e., REVO INSURANCE and ETFS Coffee go up and down completely randomly.
Pair Corralation between REVO INSURANCE and ETFS Coffee
Assuming the 90 days horizon REVO INSURANCE is expected to generate 5.14 times less return on investment than ETFS Coffee. But when comparing it to its historical volatility, REVO INSURANCE SPA is 3.01 times less risky than ETFS Coffee. It trades about 0.26 of its potential returns per unit of risk. ETFS Coffee ETC is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 4,131 in ETFS Coffee ETC on September 13, 2024 and sell it today you would earn a total of 1,411 from holding ETFS Coffee ETC or generate 34.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. ETFS Coffee ETC
Performance |
| Timeline |
| REVO INSURANCE SPA |
| ETFS Coffee ETC |
REVO INSURANCE and ETFS Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and ETFS Coffee
The main advantage of trading using opposite REVO INSURANCE and ETFS Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE 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.| REVO INSURANCE vs. Lyxor 1 | REVO INSURANCE vs. Xtrackers LevDAX | REVO INSURANCE vs. Xtrackers ShortDAX | REVO INSURANCE vs. Superior Plus Corp |
| ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |