Correlation Between Coca Cola and Miton UK
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Miton UK 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 Miton UK 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 Miton UK MicroCap, you can compare the effects of market volatilities on Coca Cola and Miton UK 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 Miton UK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Miton UK.
Diversification Opportunities for Coca Cola and Miton UK
Very good diversification
The 3 months correlation between Coca and Miton is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Co and Miton UK MicroCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miton UK MicroCap 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 Miton UK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miton UK MicroCap has no effect on the direction of Coca Cola i.e., Coca Cola and Miton UK go up and down completely randomly.
Pair Corralation between Coca Cola and Miton UK
Assuming the 90 days trading horizon Coca Cola Co is expected to generate 0.95 times more return on investment than Miton UK. However, Coca Cola Co is 1.05 times less risky than Miton UK. It trades about 0.04 of its potential returns per unit of risk. Miton UK MicroCap is currently generating about 0.0 per unit of risk. If you would invest 5,825 in Coca Cola Co on November 3, 2024 and sell it today you would earn a total of 480.00 from holding Coca Cola Co or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola Co vs. Miton UK MicroCap
Performance |
| Timeline |
| Coca Cola |
| Miton UK MicroCap |
Coca Cola and Miton UK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Miton UK
The main advantage of trading using opposite Coca Cola and Miton UK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Miton UK 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 Miton UK will offset losses from the drop in Miton UK's long position.| Coca Cola vs. Gruppo MutuiOnline SpA | Coca Cola vs. Delta Air Lines | Coca Cola vs. Porvair plc | Coca Cola vs. Metro Bank PLC |
| Miton UK vs. Jacquet Metal Service | Miton UK vs. Playtech Plc | Miton UK vs. Made Tech Group | Miton UK vs. Ashtead Technology Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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