Correlation Between ETFS Coffee and Visa
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By analyzing existing cross correlation between ETFS Coffee ETC and Visa Inc, you can compare the effects of market volatilities on ETFS Coffee and Visa 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 ETFS Coffee with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and Visa.
Diversification Opportunities for ETFS Coffee and Visa
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ETFS and Visa is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and Visa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Inc and ETFS 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 ETFS Coffee ETC are associated (or correlated) with Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Inc has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and Visa go up and down completely randomly.
Pair Corralation between ETFS Coffee and Visa
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 41.96 times more return on investment than Visa. However, ETFS Coffee is 41.96 times more volatile than Visa Inc. It trades about 0.05 of its potential returns per unit of risk. Visa Inc is currently generating about 0.09 per unit of risk. If you would invest 100.00 in ETFS Coffee ETC on September 13, 2024 and sell it today you would earn a total of 5,442 from holding ETFS Coffee ETC or generate 5442.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.61% |
| Values | Daily Returns |
ETFS Coffee ETC vs. Visa Inc
Performance |
| Timeline |
| ETFS Coffee ETC |
| Visa Inc |
ETFS Coffee and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and Visa
The main advantage of trading using opposite ETFS Coffee and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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