Correlation Between SPoT Coffee and Power Financial

Can any of the company-specific risk be diversified away by investing in both SPoT Coffee and Power Financial 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 Power Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPoT Coffee and Power Financial Corp, you can compare the effects of market volatilities on SPoT Coffee and Power Financial 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 Power Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPoT Coffee and Power Financial.

Diversification Opportunities for SPoT Coffee and Power Financial

0.0

Correlation Coefficient

SPoT Coffee  Power Financial

Pay attention - limited upside

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

Pair Corralation between SPoT Coffee and Power Financial

If you would invest  2,355  in Power Financial Corp on April 22, 2025 and sell it today you would earn a total of  136.00  from holding Power Financial Corp or generate 5.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

SPoT Coffee  vs.  Power Financial Corp

SPoT Coffee

Risk-Adjusted Performance

Very Weak

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 current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Power Financial Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Power Financial Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Power Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPoT Coffee and Power Financial

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

The idea behind SPoT Coffee and Power Financial Corp 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.