Correlation Between ETFS Coffee and Hyster Yale
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and Hyster Yale 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 Hyster Yale 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 Hyster Yale Materials Handling, you can compare the effects of market volatilities on ETFS Coffee and Hyster Yale 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 Hyster Yale. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and Hyster Yale.
Diversification Opportunities for ETFS Coffee and Hyster Yale
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ETFS and Hyster is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and Hyster Yale Materials Handling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyster Yale Materials 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 Hyster Yale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyster Yale Materials has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and Hyster Yale go up and down completely randomly.
Pair Corralation between ETFS Coffee and Hyster Yale
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 1.55 times more return on investment than Hyster Yale. However, ETFS Coffee is 1.55 times more volatile than Hyster Yale Materials Handling. It trades about 0.24 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about 0.24 per unit of risk. If you would invest 5,181 in ETFS Coffee ETC on October 30, 2024 and sell it today you would earn a total of 517.00 from holding ETFS Coffee ETC or generate 9.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ETFS Coffee ETC vs. Hyster Yale Materials Handling
Performance |
| Timeline |
| ETFS Coffee ETC |
| Hyster Yale Materials |
ETFS Coffee and Hyster Yale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and Hyster Yale
The main advantage of trading using opposite ETFS Coffee and Hyster Yale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, Hyster Yale 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 Hyster Yale will offset losses from the drop in Hyster Yale's long position.| ETFS Coffee vs. GRUPO CARSO A1 | ETFS Coffee vs. Grupo Carso SAB | ETFS Coffee vs. Cars Inc | ETFS Coffee vs. Calibre Mining Corp |
| Hyster Yale vs. USWE SPORTS AB | Hyster Yale vs. PLAYWAY SA ZY 10 | Hyster Yale vs. InPlay Oil Corp | Hyster Yale vs. SCOTT TECHNOLOGY |
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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