Correlation Between Associated British and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Associated British 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 Associated British and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated British Foods and Coca Cola HBC, you can compare the effects of market volatilities on Associated British 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 Associated British with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated British and Coca Cola.
Diversification Opportunities for Associated British and Coca Cola
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Associated and Coca is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Associated British Foods 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 Associated British 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 Associated British Foods 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 Associated British i.e., Associated British and Coca Cola go up and down completely randomly.
Pair Corralation between Associated British and Coca Cola
If you would invest 3,063 in Coca Cola HBC on November 1, 2024 and sell it today you would earn a total of 0.00 from holding Coca Cola HBC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Associated British Foods vs. Coca Cola HBC
Performance |
| Timeline |
| Associated British Foods |
| Coca Cola HBC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Associated British and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated British and Coca Cola
The main advantage of trading using opposite Associated British and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated British 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.| Associated British vs. Artisan Consumer Goods | Associated British vs. Altavoz Entertainment | Associated British vs. Avi Ltd ADR | Associated British vs. The a2 Milk |
| Coca Cola vs. Carlsberg AS | Coca Cola vs. Bunzl plc | Coca Cola vs. Associated British Foods | Coca Cola vs. Kerry Group PLC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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