Correlation Between Bayview Acquisition and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Bayview Acquisition 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 Bayview Acquisition and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayview Acquisition Corp and Coca Cola Consolidated, you can compare the effects of market volatilities on Bayview Acquisition 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 Bayview Acquisition with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayview Acquisition and Coca Cola.
Diversification Opportunities for Bayview Acquisition and Coca Cola
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bayview and Coca is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bayview Acquisition Corp and Coca Cola Consolidated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Consolidated and Bayview Acquisition 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 Bayview Acquisition Corp 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 Consolidated has no effect on the direction of Bayview Acquisition i.e., Bayview Acquisition and Coca Cola go up and down completely randomly.
Pair Corralation between Bayview Acquisition and Coca Cola
Assuming the 90 days horizon Bayview Acquisition Corp is expected to generate 0.29 times more return on investment than Coca Cola. However, Bayview Acquisition Corp is 3.46 times less risky than Coca Cola. It trades about 0.08 of its potential returns per unit of risk. Coca Cola Consolidated is currently generating about -0.01 per unit of risk. If you would invest 1,052 in Bayview Acquisition Corp on September 2, 2024 and sell it today you would earn a total of 28.00 from holding Bayview Acquisition Corp or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayview Acquisition Corp vs. Coca Cola Consolidated
Performance |
| Timeline |
| Bayview Acquisition Corp |
| Coca Cola Consolidated |
Bayview Acquisition and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayview Acquisition and Coca Cola
The main advantage of trading using opposite Bayview Acquisition and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayview Acquisition 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.| Bayview Acquisition vs. Tesla Inc | Bayview Acquisition vs. Reservoir Media | Bayview Acquisition vs. Cars Inc | Bayview Acquisition vs. BCE Inc |
| Coca Cola vs. The Coca Cola | Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Keurig Dr Pepper |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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