Correlation Between ETFS Coffee and ZINC MEDIA
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and ZINC MEDIA 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 ZINC MEDIA 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 ZINC MEDIA GR, you can compare the effects of market volatilities on ETFS Coffee and ZINC MEDIA 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 ZINC MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and ZINC MEDIA.
Diversification Opportunities for ETFS Coffee and ZINC MEDIA
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ETFS and ZINC is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and ZINC MEDIA GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINC MEDIA GR 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 ZINC MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINC MEDIA GR has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and ZINC MEDIA go up and down completely randomly.
Pair Corralation between ETFS Coffee and ZINC MEDIA
Assuming the 90 days trading horizon ETFS Coffee is expected to generate 1.6 times less return on investment than ZINC MEDIA. But when comparing it to its historical volatility, ETFS Coffee ETC is 1.16 times less risky than ZINC MEDIA. It trades about 0.22 of its potential returns per unit of risk. ZINC MEDIA GR is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 56.00 in ZINC MEDIA GR on October 26, 2024 and sell it today you would earn a total of 8.00 from holding ZINC MEDIA GR or generate 14.29% 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. ZINC MEDIA GR
Performance |
| Timeline |
| ETFS Coffee ETC |
| ZINC MEDIA GR |
ETFS Coffee and ZINC MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and ZINC MEDIA
The main advantage of trading using opposite ETFS Coffee and ZINC MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, ZINC MEDIA 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 ZINC MEDIA will offset losses from the drop in ZINC MEDIA's long position.| ETFS Coffee vs. Vulcan Materials | ETFS Coffee vs. T MOBILE US | ETFS Coffee vs. Summit Materials | ETFS Coffee vs. The Yokohama Rubber |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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