Correlation Between ETFS Coffee and ALIOR BANK
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and ALIOR BANK 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 ALIOR BANK 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 ALIOR BANK, you can compare the effects of market volatilities on ETFS Coffee and ALIOR BANK 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 ALIOR BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and ALIOR BANK.
Diversification Opportunities for ETFS Coffee and ALIOR BANK
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ETFS and ALIOR is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and ALIOR BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALIOR BANK 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 ALIOR BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALIOR BANK has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and ALIOR BANK go up and down completely randomly.
Pair Corralation between ETFS Coffee and ALIOR BANK
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 0.89 times more return on investment than ALIOR BANK. However, ETFS Coffee ETC is 1.12 times less risky than ALIOR BANK. It trades about 0.67 of its potential returns per unit of risk. ALIOR BANK is currently generating about 0.11 per unit of risk. If you would invest 3,796 in ETFS Coffee ETC on September 2, 2024 and sell it today you would earn a total of 1,463 from holding ETFS Coffee ETC or generate 38.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ETFS Coffee ETC vs. ALIOR BANK
Performance |
| Timeline |
| ETFS Coffee ETC |
| ALIOR BANK |
ETFS Coffee and ALIOR BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and ALIOR BANK
The main advantage of trading using opposite ETFS Coffee and ALIOR BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, ALIOR BANK 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 ALIOR BANK will offset losses from the drop in ALIOR BANK's long position.| ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc |
| ALIOR BANK vs. IMAGIN MEDICAL INC | ALIOR BANK vs. Japan Medical Dynamic | ALIOR BANK vs. MEDICAL FACILITIES NEW | ALIOR BANK vs. ETFS Coffee ETC |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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