Correlation Between Coca-Cola Consolidated and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Coca-Cola Consolidated and Solstad Offshore 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 Coca-Cola Consolidated and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola Consolidated and Solstad Offshore ASA, you can compare the effects of market volatilities on Coca-Cola Consolidated and Solstad Offshore 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 Coca-Cola Consolidated with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca-Cola Consolidated and Solstad Offshore.
Diversification Opportunities for Coca-Cola Consolidated and Solstad Offshore
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca-Cola and Solstad is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Consolidated and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA and Coca-Cola Consolidated 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 Coca Cola Consolidated are associated (or correlated) with Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of Coca-Cola Consolidated i.e., Coca-Cola Consolidated and Solstad Offshore go up and down completely randomly.
Pair Corralation between Coca-Cola Consolidated and Solstad Offshore
Assuming the 90 days horizon Coca Cola Consolidated is expected to generate 0.93 times more return on investment than Solstad Offshore. However, Coca Cola Consolidated is 1.08 times less risky than Solstad Offshore. It trades about 0.07 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about -0.27 per unit of risk. If you would invest 133,000 in Coca Cola Consolidated on December 4, 2024 and sell it today you would earn a total of 3,000 from holding Coca Cola Consolidated or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola Consolidated vs. Solstad Offshore ASA
Performance |
| Timeline |
| Coca Cola Consolidated |
| Solstad Offshore ASA |
Coca-Cola Consolidated and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca-Cola Consolidated and Solstad Offshore
The main advantage of trading using opposite Coca-Cola Consolidated and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca-Cola Consolidated position performs unexpectedly, Solstad Offshore 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 Solstad Offshore will offset losses from the drop in Solstad Offshore's long position.| Coca-Cola Consolidated vs. Coca Cola FEMSA SAB | Coca-Cola Consolidated vs. Yakult Honsha CoLtd | Coca-Cola Consolidated vs. Coca Cola HBC | Coca-Cola Consolidated vs. CHINA FOODS UNSPADR20 |
| Solstad Offshore vs. BJs Restaurants | Solstad Offshore vs. Western Copper and | Solstad Offshore vs. Harmony Gold Mining | Solstad Offshore vs. BlueScope Steel Limited |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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