Correlation Between ETFS Coffee and CARSALESCOM
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and CARSALESCOM 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 CARSALESCOM 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 CARSALESCOM, you can compare the effects of market volatilities on ETFS Coffee and CARSALESCOM 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 CARSALESCOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and CARSALESCOM.
Diversification Opportunities for ETFS Coffee and CARSALESCOM
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ETFS and CARSALESCOM is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and CARSALESCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARSALESCOM 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 CARSALESCOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARSALESCOM has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and CARSALESCOM go up and down completely randomly.
Pair Corralation between ETFS Coffee and CARSALESCOM
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 1.86 times more return on investment than CARSALESCOM. However, ETFS Coffee is 1.86 times more volatile than CARSALESCOM. It trades about 0.3 of its potential returns per unit of risk. CARSALESCOM is currently generating about -0.06 per unit of risk. If you would invest 3,796 in ETFS Coffee ETC on October 1, 2024 and sell it today you would earn a total of 1,417 from holding ETFS Coffee ETC or generate 37.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
ETFS Coffee ETC vs. CARSALESCOM
Performance |
| Timeline |
| ETFS Coffee ETC |
| CARSALESCOM |
ETFS Coffee and CARSALESCOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and CARSALESCOM
The main advantage of trading using opposite ETFS Coffee and CARSALESCOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, CARSALESCOM 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 CARSALESCOM will offset losses from the drop in CARSALESCOM's long position.| ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc |
| CARSALESCOM vs. Pembina Pipeline Corp | CARSALESCOM vs. Boyd Gaming | CARSALESCOM vs. Penn National Gaming | CARSALESCOM vs. New Residential Investment |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |