Correlation Between Coca Cola and LION ONE
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By analyzing existing cross correlation between The Coca Cola and LION ONE METALS, you can compare the effects of market volatilities on Coca Cola and LION ONE 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 with a short position of LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and LION ONE.
Diversification Opportunities for Coca Cola and LION ONE
Very weak diversification
The 3 months correlation between Coca and LION is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and LION ONE METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LION ONE METALS and Coca Cola 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 The Coca Cola are associated (or correlated) with LION ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LION ONE METALS has no effect on the direction of Coca Cola i.e., Coca Cola and LION ONE go up and down completely randomly.
Pair Corralation between Coca Cola and LION ONE
Assuming the 90 days trading horizon The Coca Cola is expected to generate 0.12 times more return on investment than LION ONE. However, The Coca Cola is 8.22 times less risky than LION ONE. It trades about -0.13 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.12 per unit of risk. If you would invest 6,089 in The Coca Cola on September 28, 2024 and sell it today you would lose (137.00) from holding The Coca Cola or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. LION ONE METALS
Performance |
| Timeline |
| Coca Cola |
| LION ONE METALS |
Coca Cola and LION ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and LION ONE
The main advantage of trading using opposite Coca Cola and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, LION ONE 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 LION ONE will offset losses from the drop in LION ONE's long position.| Coca Cola vs. LION ONE METALS | Coca Cola vs. NURAN WIRELESS INC | Coca Cola vs. Alfa Financial Software | Coca Cola vs. CENTURIA OFFICE REIT |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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