Correlation Between ETFS Coffee and Graphic Packaging

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

Diversification Opportunities for ETFS Coffee and Graphic Packaging

0.65

Correlation Coefficient

ETFS Coffee  Graphic Packaging

Poor diversification

The 3 months correlation between ETFS and Graphic is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and Graphic Packaging Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphic Packaging Holding 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 Graphic Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphic Packaging Holding has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and Graphic Packaging go up and down completely randomly.

Pair Corralation between ETFS Coffee and Graphic Packaging

Assuming the 90 days trading horizon ETFS Coffee ETC is expected to under-perform the Graphic Packaging. But the stock apears to be less risky and, when comparing its historical volatility, ETFS Coffee ETC is 1.06 times less risky than Graphic Packaging. The stock trades about -0.18 of its potential returns per unit of risk. The Graphic Packaging Holding is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,202  in Graphic Packaging Holding on April 24, 2025 and sell it today you would lose (241.00) from holding Graphic Packaging Holding or give up 10.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

ETFS Coffee ETC  vs.  Graphic Packaging Holding

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.

Graphic Packaging Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Graphic Packaging Holding 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 Graphic Packaging

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

The idea behind ETFS Coffee ETC and Graphic Packaging Holding 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 CEOs Directory module to screen CEOs from public companies around the world.