Correlation Between ETFS Coffee and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and COVIVIO HOTELS 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 ETFS Coffee and COVIVIO HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS Coffee ETC and COVIVIO HOTELS INH, you can compare the effects of market volatilities on ETFS Coffee and COVIVIO HOTELS 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 COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and COVIVIO HOTELS.
Diversification Opportunities for ETFS Coffee and COVIVIO HOTELS
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between ETFS and COVIVIO is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH 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 COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between ETFS Coffee and COVIVIO HOTELS
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 3.96 times more return on investment than COVIVIO HOTELS. However, ETFS Coffee is 3.96 times more volatile than COVIVIO HOTELS INH. It trades about 0.49 of its potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about -0.16 per unit of risk. If you would invest 3,861 in ETFS Coffee ETC on August 28, 2024 and sell it today you would earn a total of 1,068 from holding ETFS Coffee ETC or generate 27.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
ETFS Coffee ETC vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| ETFS Coffee ETC |
| COVIVIO HOTELS INH |
ETFS Coffee and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and COVIVIO HOTELS
The main advantage of trading using opposite ETFS Coffee and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, COVIVIO HOTELS 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS's long position.| ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc |
| COVIVIO HOTELS vs. Charter Communications | COVIVIO HOTELS vs. Consolidated Communications Holdings | COVIVIO HOTELS vs. Entravision Communications | COVIVIO HOTELS vs. Beijing Media |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |