Correlation Between ETFS Coffee and GLG LIFE
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and GLG LIFE 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 GLG LIFE 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 GLG LIFE TECH, you can compare the effects of market volatilities on ETFS Coffee and GLG LIFE 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 GLG LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and GLG LIFE.
Diversification Opportunities for ETFS Coffee and GLG LIFE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ETFS and GLG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and GLG LIFE TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLG LIFE TECH 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 GLG LIFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLG LIFE TECH has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and GLG LIFE go up and down completely randomly.
Pair Corralation between ETFS Coffee and GLG LIFE
If you would invest 3,914 in ETFS Coffee ETC on August 25, 2024 and sell it today you would earn a total of 587.00 from holding ETFS Coffee ETC or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
ETFS Coffee ETC vs. GLG LIFE TECH
Performance |
| Timeline |
| ETFS Coffee ETC |
| GLG LIFE TECH |
ETFS Coffee and GLG LIFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and GLG LIFE
The main advantage of trading using opposite ETFS Coffee and GLG LIFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, GLG LIFE 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 GLG LIFE will offset losses from the drop in GLG LIFE'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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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