Correlation Between ETFS Coffee and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE, you can compare the effects of market volatilities on ETFS Coffee and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and GEELY AUTOMOBILE.
Diversification Opportunities for ETFS Coffee and GEELY AUTOMOBILE
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ETFS and GEELY is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between ETFS Coffee and GEELY AUTOMOBILE
Assuming the 90 days trading horizon ETFS Coffee is expected to generate 1.1 times less return on investment than GEELY AUTOMOBILE. But when comparing it to its historical volatility, ETFS Coffee ETC is 1.36 times less risky than GEELY AUTOMOBILE. It trades about 0.22 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 103.00 in GEELY AUTOMOBILE on November 5, 2024 and sell it today you would earn a total of 76.00 from holding GEELY AUTOMOBILE or generate 73.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.06% |
| Values | Daily Returns |
ETFS Coffee ETC vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| ETFS Coffee ETC |
| GEELY AUTOMOBILE |
ETFS Coffee and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and GEELY AUTOMOBILE
The main advantage of trading using opposite ETFS Coffee and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| ETFS Coffee vs. BE Semiconductor Industries | ETFS Coffee vs. Magnachip Semiconductor | ETFS Coffee vs. NXP Semiconductors NV | ETFS Coffee vs. ZINC MEDIA GR |
| GEELY AUTOMOBILE vs. Molson Coors Beverage | GEELY AUTOMOBILE vs. PLAYMATES TOYS | GEELY AUTOMOBILE vs. US FOODS HOLDING | GEELY AUTOMOBILE vs. PATTIES FOODS |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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