Correlation Between ETFS Coffee and CTS Eventim

Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and CTS Eventim 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 CTS Eventim 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 CTS Eventim AG, you can compare the effects of market volatilities on ETFS Coffee and CTS Eventim 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 CTS Eventim. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and CTS Eventim.

Diversification Opportunities for ETFS Coffee and CTS Eventim

0.0

Correlation Coefficient

ETFS Coffee  CTS Eventim

Pay attention - limited upside

The 3 months correlation between ETFS and CTS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and CTS Eventim AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Eventim AG 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 CTS Eventim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Eventim AG has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and CTS Eventim go up and down completely randomly.

Pair Corralation between ETFS Coffee and CTS Eventim

If you would invest  5,181  in ETFS Coffee ETC on December 29, 2024 and sell it today you would earn a total of  1,028  from holding ETFS Coffee ETC or generate 19.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

ETFS Coffee ETC  vs.  CTS Eventim AG

ETFS Coffee ETC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ETFS Coffee ETC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ETFS Coffee reported solid returns over the last few months and may actually be approaching a breakup point.

CTS Eventim AG

Risk-Adjusted Performance

Solid

Over the last 90 days CTS Eventim AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, CTS Eventim is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ETFS Coffee and CTS Eventim

The main advantage of trading using opposite ETFS Coffee and CTS Eventim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee position performs unexpectedly, CTS Eventim 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 CTS Eventim will offset losses from the drop in CTS Eventim's long position.

The idea behind ETFS Coffee ETC and CTS Eventim AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.