Correlation Between ETFS Coffee and WOLFDEN RES
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and WOLFDEN RES 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 WOLFDEN RES 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 WOLFDEN RES P, you can compare the effects of market volatilities on ETFS Coffee and WOLFDEN RES 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 WOLFDEN RES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and WOLFDEN RES.
Diversification Opportunities for ETFS Coffee and WOLFDEN RES
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between ETFS and WOLFDEN is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and WOLFDEN RES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOLFDEN RES P 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 WOLFDEN RES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOLFDEN RES P has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and WOLFDEN RES go up and down completely randomly.
Pair Corralation between ETFS Coffee and WOLFDEN RES
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 0.2 times more return on investment than WOLFDEN RES. However, ETFS Coffee ETC is 4.98 times less risky than WOLFDEN RES. It trades about 0.18 of its potential returns per unit of risk. WOLFDEN RES P is currently generating about -0.01 per unit of risk. If you would invest 5,181 in ETFS Coffee ETC on October 29, 2024 and sell it today you would earn a total of 382.00 from holding ETFS Coffee ETC or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ETFS Coffee ETC vs. WOLFDEN RES P
Performance |
| Timeline |
| ETFS Coffee ETC |
| WOLFDEN RES P |
ETFS Coffee and WOLFDEN RES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and WOLFDEN RES
The main advantage of trading using opposite ETFS Coffee and WOLFDEN RES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, WOLFDEN RES 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 WOLFDEN RES will offset losses from the drop in WOLFDEN RES's long position.| ETFS Coffee vs. Easy Software AG | ETFS Coffee vs. PENN Entertainment | ETFS Coffee vs. AECOM TECHNOLOGY | ETFS Coffee vs. Casio Computer CoLtd |
| WOLFDEN RES vs. ETFS Coffee ETC | WOLFDEN RES vs. ZINC MEDIA GR | WOLFDEN RES vs. Tencent Music Entertainment | WOLFDEN RES vs. PROSIEBENSAT1 MEDIADR4 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |