Correlation Between ETFS Coffee and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and Yuexiu Transport 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 Yuexiu Transport 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 Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on ETFS Coffee and Yuexiu Transport 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 Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and Yuexiu Transport.
Diversification Opportunities for ETFS Coffee and Yuexiu Transport
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ETFS and Yuexiu is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf 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 Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and Yuexiu Transport go up and down completely randomly.
Pair Corralation between ETFS Coffee and Yuexiu Transport
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 10.31 times more return on investment than Yuexiu Transport. However, ETFS Coffee is 10.31 times more volatile than Yuexiu Transport Infrastructure. It trades about 0.05 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.07 per unit of risk. If you would invest 97.00 in ETFS Coffee ETC on October 19, 2024 and sell it today you would earn a total of 5,284 from holding ETFS Coffee ETC or generate 5447.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.8% |
| Values | Daily Returns |
ETFS Coffee ETC vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| ETFS Coffee ETC |
| Yuexiu Transport Inf |
ETFS Coffee and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and Yuexiu Transport
The main advantage of trading using opposite ETFS Coffee and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.| ETFS Coffee vs. CANON MARKETING JP | ETFS Coffee vs. Entravision Communications | ETFS Coffee vs. H2O Retailing | ETFS Coffee vs. TRADEDOUBLER AB SK |
| Yuexiu Transport vs. ARDAGH METAL PACDL 0001 | Yuexiu Transport vs. GREENX METALS LTD | Yuexiu Transport vs. Western Copper and | Yuexiu Transport vs. Comba Telecom Systems |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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