Correlation Between ETFS Coffee and WillScot Mobile
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and WillScot Mobile 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 WillScot Mobile 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 WillScot Mobile Mini, you can compare the effects of market volatilities on ETFS Coffee and WillScot Mobile 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 WillScot Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and WillScot Mobile.
Diversification Opportunities for ETFS Coffee and WillScot Mobile
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ETFS and WillScot is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and WillScot Mobile Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WillScot Mobile Mini 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 WillScot Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WillScot Mobile Mini has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and WillScot Mobile go up and down completely randomly.
Pair Corralation between ETFS Coffee and WillScot Mobile
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 1.24 times more return on investment than WillScot Mobile. However, ETFS Coffee is 1.24 times more volatile than WillScot Mobile Mini. It trades about 0.26 of its potential returns per unit of risk. WillScot Mobile Mini is currently generating about -0.01 per unit of risk. If you would invest 4,501 in ETFS Coffee ETC on September 21, 2024 and sell it today you would earn a total of 854.00 from holding ETFS Coffee ETC or generate 18.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ETFS Coffee ETC vs. WillScot Mobile Mini
Performance |
| Timeline |
| ETFS Coffee ETC |
| WillScot Mobile Mini |
ETFS Coffee and WillScot Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and WillScot Mobile
The main advantage of trading using opposite ETFS Coffee and WillScot Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, WillScot Mobile 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 WillScot Mobile will offset losses from the drop in WillScot Mobile's long position.| ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc |
| WillScot Mobile vs. ETFS Coffee ETC | WillScot Mobile vs. UNITED UTILITIES GR | WillScot Mobile vs. XLMedia PLC | WillScot Mobile vs. TOWNSQUARE MEDIA INC |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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