Correlation Between Coca Cola and Enbridge
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Enbridge 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 Coca Cola and Enbridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola Co and Enbridge, you can compare the effects of market volatilities on Coca Cola and Enbridge 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 Coca Cola with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Enbridge.
Diversification Opportunities for Coca Cola and Enbridge
Pay attention - limited upside
The 3 months correlation between Coca and Enbridge is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Co and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and Coca Cola 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 Coca Cola Co are associated (or correlated) with Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Coca Cola i.e., Coca Cola and Enbridge go up and down completely randomly.
Pair Corralation between Coca Cola and Enbridge
If you would invest (100.00) in Enbridge on August 31, 2024 and sell it today you would earn a total of 100.00 from holding Enbridge or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Coca Cola Co vs. Enbridge
Performance |
| Timeline |
| Coca Cola |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Enbridge |
Coca Cola and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Enbridge
The main advantage of trading using opposite Coca Cola and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge's long position.| Coca Cola vs. Celebrus Technologies plc | Coca Cola vs. Ashtead Technology Holdings | Coca Cola vs. Made Tech Group | Coca Cola vs. Premier Foods PLC |
| Enbridge vs. Fevertree Drinks Plc | Enbridge vs. Schroders Investment Trusts | Enbridge vs. Axfood AB | Enbridge vs. Kinnevik Investment AB |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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