Correlation Between SPoT Coffee and INTEL CDR
Can any of the company-specific risk be diversified away by investing in both SPoT Coffee and INTEL CDR 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 SPoT Coffee and INTEL CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPoT Coffee and INTEL CDR, you can compare the effects of market volatilities on SPoT Coffee and INTEL CDR 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 SPoT Coffee with a short position of INTEL CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPoT Coffee and INTEL CDR.
Diversification Opportunities for SPoT Coffee and INTEL CDR
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPoT and INTEL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPoT Coffee and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR and SPoT 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 SPoT Coffee are associated (or correlated) with INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of SPoT Coffee i.e., SPoT Coffee and INTEL CDR go up and down completely randomly.
Pair Corralation between SPoT Coffee and INTEL CDR
Assuming the 90 days horizon SPoT Coffee is expected to generate 3.07 times more return on investment than INTEL CDR. However, SPoT Coffee is 3.07 times more volatile than INTEL CDR. It trades about 0.01 of its potential returns per unit of risk. INTEL CDR is currently generating about -0.02 per unit of risk. If you would invest 7.50 in SPoT Coffee on October 9, 2024 and sell it today you would lose (6.00) from holding SPoT Coffee or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.08% |
| Values | Daily Returns |
SPoT Coffee vs. INTEL CDR
Performance |
| Timeline |
| SPoT Coffee |
| INTEL CDR |
SPoT Coffee and INTEL CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPoT Coffee and INTEL CDR
The main advantage of trading using opposite SPoT Coffee and INTEL CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPoT Coffee position performs unexpectedly, INTEL CDR 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 INTEL CDR will offset losses from the drop in INTEL CDR's long position.| SPoT Coffee vs. Micron Technology, | SPoT Coffee vs. Stampede Drilling | SPoT Coffee vs. Converge Technology Solutions | SPoT Coffee vs. Constellation Software |
| INTEL CDR vs. Canlan Ice Sports | INTEL CDR vs. Rogers Communications | INTEL CDR vs. VIP Entertainment Technologies | INTEL CDR vs. Precision Drilling |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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