Correlation Between Coffee Holding and Natural Alternatives
Can any of the company-specific risk be diversified away by investing in both Coffee Holding and Natural Alternatives 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 Coffee Holding and Natural Alternatives into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coffee Holding Co and Natural Alternatives International, you can compare the effects of market volatilities on Coffee Holding and Natural Alternatives 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 Coffee Holding with a short position of Natural Alternatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and Natural Alternatives.
Diversification Opportunities for Coffee Holding and Natural Alternatives
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coffee and Natural is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co and Natural Alternatives Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Alternatives and Coffee Holding 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 Coffee Holding Co are associated (or correlated) with Natural Alternatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Alternatives has no effect on the direction of Coffee Holding i.e., Coffee Holding and Natural Alternatives go up and down completely randomly.
Pair Corralation between Coffee Holding and Natural Alternatives
Considering the 90-day investment horizon Coffee Holding Co is expected to generate 0.84 times more return on investment than Natural Alternatives. However, Coffee Holding Co is 1.19 times less risky than Natural Alternatives. It trades about -0.03 of its potential returns per unit of risk. Natural Alternatives International is currently generating about -0.1 per unit of risk. If you would invest 457.00 in Coffee Holding Co on July 21, 2025 and sell it today you would lose (35.00) from holding Coffee Holding Co or give up 7.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coffee Holding Co vs. Natural Alternatives Internati
Performance |
| Timeline |
| Coffee Holding |
| Natural Alternatives |
Coffee Holding and Natural Alternatives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and Natural Alternatives
The main advantage of trading using opposite Coffee Holding and Natural Alternatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding position performs unexpectedly, Natural Alternatives 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 Natural Alternatives will offset losses from the drop in Natural Alternatives' long position.| Coffee Holding vs. Bit Origin | Coffee Holding vs. BranchOut Food Common | Coffee Holding vs. Nocera Inc | Coffee Holding vs. Australian Oilseeds Holdings |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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