Correlation Between SPoT Coffee and Globex Mining

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Can any of the company-specific risk be diversified away by investing in both SPoT Coffee and Globex Mining 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 SPoT Coffee and Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPoT Coffee and Globex Mining Enterprises, you can compare the effects of market volatilities on SPoT Coffee and Globex Mining 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 SPoT Coffee with a short position of Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPoT Coffee and Globex Mining.

Diversification Opportunities for SPoT Coffee and Globex Mining

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between SPoT Coffee and Globex Mining

If you would invest  1.50  in SPoT Coffee on April 20, 2025 and sell it today you would earn a total of  0.00  from holding SPoT Coffee or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SPoT Coffee  vs.  Globex Mining Enterprises

 Performance 
       Timeline  
SPoT Coffee 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days SPoT Coffee has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, SPoT Coffee is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Globex Mining Enterprises 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Globex Mining Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Globex Mining is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

SPoT Coffee and Globex Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SPoT Coffee and Globex Mining

The main advantage of trading using opposite SPoT Coffee and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPoT Coffee position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.
The idea behind SPoT Coffee and Globex Mining Enterprises 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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