Correlation Between Vitec Software and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Vitec Software and Coca Cola 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 Vitec Software and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vitec Software Group and Coca Cola HBC, you can compare the effects of market volatilities on Vitec Software and Coca Cola 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 Vitec Software with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitec Software and Coca Cola.
Diversification Opportunities for Vitec Software and Coca Cola
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vitec and Coca is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vitec Software Group and Coca Cola HBC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola HBC and Vitec Software 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 Vitec Software Group are associated (or correlated) with Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola HBC has no effect on the direction of Vitec Software i.e., Vitec Software and Coca Cola go up and down completely randomly.
Pair Corralation between Vitec Software and Coca Cola
Assuming the 90 days trading horizon Vitec Software Group is expected to generate 2.77 times more return on investment than Coca Cola. However, Vitec Software is 2.77 times more volatile than Coca Cola HBC. It trades about 0.06 of its potential returns per unit of risk. Coca Cola HBC is currently generating about -0.03 per unit of risk. If you would invest 49,200 in Vitec Software Group on September 12, 2024 and sell it today you would earn a total of 2,309 from holding Vitec Software Group or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vitec Software Group vs. Coca Cola HBC
Performance |
| Timeline |
| Vitec Software Group |
| Coca Cola HBC |
Vitec Software and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vitec Software and Coca Cola
The main advantage of trading using opposite Vitec Software and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitec Software position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Vitec Software vs. Hong Kong Land | Vitec Software vs. Neometals | Vitec Software vs. Coor Service Management | Vitec Software vs. Fidelity Sustainable USD |
| Coca Cola vs. Ross Stores | Coca Cola vs. Datagroup SE | Coca Cola vs. Taylor Maritime Investments | Coca Cola vs. Tyson Foods Cl |
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 Stocks Directory module to find actively traded stocks across global markets.
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