Correlation Between Schibsted ASA and Coffee Holding
Can any of the company-specific risk be diversified away by investing in both Schibsted ASA and Coffee Holding 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 Schibsted ASA and Coffee Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schibsted ASA B and Coffee Holding Co, you can compare the effects of market volatilities on Schibsted ASA and Coffee Holding 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 Schibsted ASA with a short position of Coffee Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schibsted ASA and Coffee Holding.
Diversification Opportunities for Schibsted ASA and Coffee Holding
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Schibsted and Coffee is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Schibsted ASA B and Coffee Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coffee Holding and Schibsted ASA 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 Schibsted ASA B are associated (or correlated) with Coffee Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coffee Holding has no effect on the direction of Schibsted ASA i.e., Schibsted ASA and Coffee Holding go up and down completely randomly.
Pair Corralation between Schibsted ASA and Coffee Holding
Assuming the 90 days trading horizon Schibsted ASA B is expected to under-perform the Coffee Holding. But the stock apears to be less risky and, when comparing its historical volatility, Schibsted ASA B is 2.45 times less risky than Coffee Holding. The stock trades about -0.08 of its potential returns per unit of risk. The Coffee Holding Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 286.00 in Coffee Holding Co on October 16, 2024 and sell it today you would earn a total of 78.00 from holding Coffee Holding Co or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schibsted ASA B vs. Coffee Holding Co
Performance |
| Timeline |
| Schibsted ASA B |
| Coffee Holding |
Schibsted ASA and Coffee Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schibsted ASA and Coffee Holding
The main advantage of trading using opposite Schibsted ASA and Coffee Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schibsted ASA position performs unexpectedly, Coffee Holding 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 Coffee Holding will offset losses from the drop in Coffee Holding's long position.| Schibsted ASA vs. Coffee Holding Co | Schibsted ASA vs. FORWARD AIR P | Schibsted ASA vs. SYSTEMAIR AB | Schibsted ASA vs. Pentair plc |
| Coffee Holding vs. EBRO FOODS | Coffee Holding vs. Astral Foods Limited | Coffee Holding vs. THAI BEVERAGE | Coffee Holding vs. CN MODERN DAIRY |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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