Correlation Between Britvic Plc and Coca-Cola FEMSA
Can any of the company-specific risk be diversified away by investing in both Britvic Plc and Coca-Cola FEMSA 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 Britvic Plc and Coca-Cola FEMSA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Britvic plc and Coca Cola FEMSA SAB, you can compare the effects of market volatilities on Britvic Plc and Coca-Cola FEMSA 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 Britvic Plc with a short position of Coca-Cola FEMSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Britvic Plc and Coca-Cola FEMSA.
Diversification Opportunities for Britvic Plc and Coca-Cola FEMSA
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Britvic and Coca-Cola is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Britvic plc and Coca Cola FEMSA SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola FEMSA and Britvic Plc 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 Britvic plc are associated (or correlated) with Coca-Cola FEMSA. 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 FEMSA has no effect on the direction of Britvic Plc i.e., Britvic Plc and Coca-Cola FEMSA go up and down completely randomly.
Pair Corralation between Britvic Plc and Coca-Cola FEMSA
Assuming the 90 days horizon Britvic plc is expected to generate 0.18 times more return on investment than Coca-Cola FEMSA. However, Britvic plc is 5.66 times less risky than Coca-Cola FEMSA. It trades about 0.05 of its potential returns per unit of risk. Coca Cola FEMSA SAB is currently generating about 0.0 per unit of risk. If you would invest 1,446 in Britvic plc on November 3, 2024 and sell it today you would earn a total of 44.00 from holding Britvic plc or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.0% |
| Values | Daily Returns |
Britvic plc vs. Coca Cola FEMSA SAB
Performance |
| Timeline |
| Britvic plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Coca Cola FEMSA |
Britvic Plc and Coca-Cola FEMSA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Britvic Plc and Coca-Cola FEMSA
The main advantage of trading using opposite Britvic Plc and Coca-Cola FEMSA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Britvic Plc position performs unexpectedly, Coca-Cola FEMSA 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 FEMSA will offset losses from the drop in Coca-Cola FEMSA's long position.| Britvic Plc vs. Laureate Education | Britvic Plc vs. OFFICE DEPOT | Britvic Plc vs. JAPAN TOBACCO UNSPADR12 | Britvic Plc vs. DEVRY EDUCATION GRP |
| Coca-Cola FEMSA vs. MOLSON RS BEVERAGE | Coca-Cola FEMSA vs. The Boston Beer | Coca-Cola FEMSA vs. AEON METALS LTD | Coca-Cola FEMSA vs. Nippon Light Metal |
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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