Correlation Between ETFS Coffee and AGRICULTBK HADR25
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and AGRICULTBK HADR25 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 AGRICULTBK HADR25 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 AGRICULTBK HADR25 YC, you can compare the effects of market volatilities on ETFS Coffee and AGRICULTBK HADR25 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 AGRICULTBK HADR25. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and AGRICULTBK HADR25.
Diversification Opportunities for ETFS Coffee and AGRICULTBK HADR25
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ETFS and AGRICULTBK is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and AGRICULTBK HADR25 YC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGRICULTBK HADR25 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 AGRICULTBK HADR25. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGRICULTBK HADR25 has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and AGRICULTBK HADR25 go up and down completely randomly.
Pair Corralation between ETFS Coffee and AGRICULTBK HADR25
Assuming the 90 days trading horizon ETFS Coffee is expected to generate 30.17 times less return on investment than AGRICULTBK HADR25. But when comparing it to its historical volatility, ETFS Coffee ETC is 1.31 times less risky than AGRICULTBK HADR25. It trades about 0.02 of its potential returns per unit of risk. AGRICULTBK HADR25 YC is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,171 in AGRICULTBK HADR25 YC on October 12, 2024 and sell it today you would earn a total of 179.00 from holding AGRICULTBK HADR25 YC or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 88.24% |
| Values | Daily Returns |
ETFS Coffee ETC vs. AGRICULTBK HADR25 YC
Performance |
| Timeline |
| ETFS Coffee ETC |
| AGRICULTBK HADR25 |
ETFS Coffee and AGRICULTBK HADR25 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and AGRICULTBK HADR25
The main advantage of trading using opposite ETFS Coffee and AGRICULTBK HADR25 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, AGRICULTBK HADR25 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 AGRICULTBK HADR25 will offset losses from the drop in AGRICULTBK HADR25's long position.| ETFS Coffee vs. Clean Energy Fuels | ETFS Coffee vs. CALTAGIRONE EDITORE | ETFS Coffee vs. United States Steel | ETFS Coffee vs. Ultra Clean Holdings |
| AGRICULTBK HADR25 vs. VULCAN MATERIALS | AGRICULTBK HADR25 vs. Electronic Arts | AGRICULTBK HADR25 vs. Nucletron Electronic Aktiengesellschaft | AGRICULTBK HADR25 vs. STORE ELECTRONIC |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |