Correlation Between ETFS Coffee and Upland Software

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

Diversification Opportunities for ETFS Coffee and Upland Software

0.71

Correlation Coefficient

ETFS Coffee  Upland Software

Poor diversification

The 3 months correlation between ETFS and Upland is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and Upland Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upland Software 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 Upland Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upland Software has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and Upland Software go up and down completely randomly.

Pair Corralation between ETFS Coffee and Upland Software

Assuming the 90 days trading horizon ETFS Coffee ETC is expected to under-perform the Upland Software. But the stock apears to be less risky and, when comparing its historical volatility, ETFS Coffee ETC is 1.64 times less risky than Upland Software. The stock trades about -0.11 of its potential returns per unit of risk. The Upland Software is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  183.00  in Upland Software on April 20, 2025 and sell it today you would lose (18.00) from holding Upland Software or give up 9.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ETFS Coffee ETC  vs.  Upland Software

ETFS Coffee ETC

Risk-Adjusted Performance

Very Weak

Over the last 90 days ETFS Coffee ETC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Upland Software

Risk-Adjusted Performance

Very Weak

Over the last 90 days Upland Software has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ETFS Coffee and Upland Software

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

The idea behind ETFS Coffee ETC and Upland Software 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.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.