Correlation Between BROADWIND ENRGY and Coca Cola
Can any of the company-specific risk be diversified away by investing in both BROADWIND ENRGY 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 BROADWIND ENRGY and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADWIND ENRGY and Coca Cola European Partners, you can compare the effects of market volatilities on BROADWIND ENRGY 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 BROADWIND ENRGY with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADWIND ENRGY and Coca Cola.
Diversification Opportunities for BROADWIND ENRGY and Coca Cola
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between BROADWIND and Coca is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding BROADWIND ENRGY and Coca Cola European Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola European and BROADWIND ENRGY 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 BROADWIND ENRGY 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 European has no effect on the direction of BROADWIND ENRGY i.e., BROADWIND ENRGY and Coca Cola go up and down completely randomly.
Pair Corralation between BROADWIND ENRGY and Coca Cola
Assuming the 90 days trading horizon BROADWIND ENRGY is expected to under-perform the Coca Cola. In addition to that, BROADWIND ENRGY is 2.62 times more volatile than Coca Cola European Partners. It trades about -0.05 of its total potential returns per unit of risk. Coca Cola European Partners is currently generating about 0.01 per unit of volatility. If you would invest 7,230 in Coca Cola European Partners on October 29, 2024 and sell it today you would earn a total of 0.00 from holding Coca Cola European Partners or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
BROADWIND ENRGY vs. Coca Cola European Partners
Performance |
| Timeline |
| BROADWIND ENRGY |
| Coca Cola European |
BROADWIND ENRGY and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADWIND ENRGY and Coca Cola
The main advantage of trading using opposite BROADWIND ENRGY and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADWIND ENRGY 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.| BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc |
| Coca Cola vs. Tyson Foods | Coca Cola vs. GWILLI FOOD | Coca Cola vs. PLANT VEDA FOODS | Coca Cola vs. Grand Canyon Education |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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