Correlation Between Yihai International and ETFS Coffee
Can any of the company-specific risk be diversified away by investing in both Yihai International and ETFS Coffee 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 Yihai International and ETFS Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yihai International Holding and ETFS Coffee ETC, you can compare the effects of market volatilities on Yihai International and ETFS Coffee 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 Yihai International with a short position of ETFS Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yihai International and ETFS Coffee.
Diversification Opportunities for Yihai International and ETFS Coffee
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Yihai and ETFS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Yihai International Holding and ETFS Coffee ETC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Coffee ETC and Yihai International 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 Yihai International Holding are associated (or correlated) with ETFS Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Coffee ETC has no effect on the direction of Yihai International i.e., Yihai International and ETFS Coffee go up and down completely randomly.
Pair Corralation between Yihai International and ETFS Coffee
Assuming the 90 days horizon Yihai International Holding is expected to under-perform the ETFS Coffee. In addition to that, Yihai International is 1.63 times more volatile than ETFS Coffee ETC. It trades about -0.22 of its total potential returns per unit of risk. ETFS Coffee ETC is currently generating about 0.09 per unit of volatility. If you would invest 5,213 in ETFS Coffee ETC on October 25, 2024 and sell it today you would earn a total of 131.00 from holding ETFS Coffee ETC or generate 2.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 94.44% |
Values | Daily Returns |
Yihai International Holding vs. ETFS Coffee ETC
Performance |
Timeline |
Yihai International |
ETFS Coffee ETC |
Yihai International and ETFS Coffee Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yihai International and ETFS Coffee
The main advantage of trading using opposite Yihai International and ETFS Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yihai International position performs unexpectedly, ETFS Coffee 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 ETFS Coffee will offset losses from the drop in ETFS Coffee's long position.Yihai International vs. Kingdee International Software | Yihai International vs. Magic Software Enterprises | Yihai International vs. MCEWEN MINING INC | Yihai International vs. OPERA SOFTWARE |
ETFS Coffee vs. GALENA MINING LTD | ETFS Coffee vs. Playtech plc | ETFS Coffee vs. SOFI TECHNOLOGIES | ETFS Coffee vs. Western Copper and |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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