Correlation Between ETFS Coffee and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and KGHM Polska 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 KGHM Polska 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 KGHM Polska Miedz, you can compare the effects of market volatilities on ETFS Coffee and KGHM Polska 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 KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and KGHM Polska.
Diversification Opportunities for ETFS Coffee and KGHM Polska
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ETFS and KGHM is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz 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 KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and KGHM Polska go up and down completely randomly.
Pair Corralation between ETFS Coffee and KGHM Polska
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 0.94 times more return on investment than KGHM Polska. However, ETFS Coffee ETC is 1.06 times less risky than KGHM Polska. It trades about 0.25 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about 0.21 per unit of risk. If you would invest 5,346 in ETFS Coffee ETC on November 2, 2024 and sell it today you would earn a total of 637.00 from holding ETFS Coffee ETC or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ETFS Coffee ETC vs. KGHM Polska Miedz
Performance |
| Timeline |
| ETFS Coffee ETC |
| KGHM Polska Miedz |
ETFS Coffee and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and KGHM Polska
The main advantage of trading using opposite ETFS Coffee and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.| ETFS Coffee vs. QBE Insurance Group | ETFS Coffee vs. Molson Coors Beverage | ETFS Coffee vs. Urban Outfitters | ETFS Coffee vs. China Resources Beer |
| KGHM Polska vs. Safety Insurance Group | KGHM Polska vs. Prosiebensat 1 Media | KGHM Polska vs. SQUIRREL MEDIA SA | KGHM Polska vs. HANOVER INSURANCE |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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