Correlation Between ETFS Coffee and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and Meiko Electronics 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 Meiko Electronics 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 Meiko Electronics Co, you can compare the effects of market volatilities on ETFS Coffee and Meiko Electronics 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 Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and Meiko Electronics.
Diversification Opportunities for ETFS Coffee and Meiko Electronics
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ETFS and Meiko is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics 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 Meiko Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiko Electronics has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and Meiko Electronics go up and down completely randomly.
Pair Corralation between ETFS Coffee and Meiko Electronics
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 0.67 times more return on investment than Meiko Electronics. However, ETFS Coffee ETC is 1.49 times less risky than Meiko Electronics. It trades about 0.15 of its potential returns per unit of risk. Meiko Electronics Co is currently generating about 0.08 per unit of risk. If you would invest 3,444 in ETFS Coffee ETC on September 27, 2024 and sell it today you would earn a total of 1,835 from holding ETFS Coffee ETC or generate 53.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 96.85% |
| Values | Daily Returns |
ETFS Coffee ETC vs. Meiko Electronics Co
Performance |
| Timeline |
| ETFS Coffee ETC |
| Meiko Electronics |
ETFS Coffee and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and Meiko Electronics
The main advantage of trading using opposite ETFS Coffee and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, Meiko Electronics 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 Meiko Electronics will offset losses from the drop in Meiko Electronics' long position.| ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc |
| Meiko Electronics vs. Titan Machinery | Meiko Electronics vs. DAIRY FARM INTL | Meiko Electronics vs. Solstad Offshore ASA | Meiko Electronics vs. ETFS Coffee ETC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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