Correlation Between ETFS Coffee and EVN AG
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and EVN AG 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 EVN AG 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 EVN AG, you can compare the effects of market volatilities on ETFS Coffee and EVN AG 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 EVN AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and EVN AG.
Diversification Opportunities for ETFS Coffee and EVN AG
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ETFS and EVN is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and EVN AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVN AG 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 EVN AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVN AG has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and EVN AG go up and down completely randomly.
Pair Corralation between ETFS Coffee and EVN AG
Assuming the 90 days trading horizon ETFS Coffee is expected to generate 6.34 times less return on investment than EVN AG. In addition to that, ETFS Coffee is 1.18 times more volatile than EVN AG. It trades about 0.05 of its total potential returns per unit of risk. EVN AG is currently generating about 0.37 per unit of volatility. If you would invest 2,060 in EVN AG on October 20, 2024 and sell it today you would earn a total of 210.00 from holding EVN AG or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
ETFS Coffee ETC vs. EVN AG
Performance |
| Timeline |
| ETFS Coffee ETC |
| EVN AG |
ETFS Coffee and EVN AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and EVN AG
The main advantage of trading using opposite ETFS Coffee and EVN AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, EVN AG 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 EVN AG will offset losses from the drop in EVN AG's long position.| ETFS Coffee vs. Virtus Investment Partners | ETFS Coffee vs. CITY OFFICE REIT | ETFS Coffee vs. MidCap Financial Investment | ETFS Coffee vs. Addus HomeCare |
| EVN AG vs. ECHO INVESTMENT ZY | EVN AG vs. EAT WELL INVESTMENT | EVN AG vs. SEI INVESTMENTS | EVN AG vs. GALENA MINING LTD |
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 CEOs Directory module to screen CEOs from public companies around the world.
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