Correlation Between Coca Cola and Prosegur Cash
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Prosegur Cash 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 and Prosegur Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola European Partners and Prosegur Cash SA, you can compare the effects of market volatilities on Coca Cola and Prosegur Cash 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 Prosegur Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Prosegur Cash.
Diversification Opportunities for Coca Cola and Prosegur Cash
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca and Prosegur is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola European Partners and Prosegur Cash SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosegur Cash SA 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 Coca Cola European Partners are associated (or correlated) with Prosegur Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosegur Cash SA has no effect on the direction of Coca Cola i.e., Coca Cola and Prosegur Cash go up and down completely randomly.
Pair Corralation between Coca Cola and Prosegur Cash
Assuming the 90 days trading horizon Coca Cola European Partners is expected to generate 0.71 times more return on investment than Prosegur Cash. However, Coca Cola European Partners is 1.41 times less risky than Prosegur Cash. It trades about 0.07 of its potential returns per unit of risk. Prosegur Cash SA is currently generating about -0.02 per unit of risk. If you would invest 5,629 in Coca Cola European Partners on August 31, 2024 and sell it today you would earn a total of 1,851 from holding Coca Cola European Partners or generate 32.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Coca Cola European Partners vs. Prosegur Cash SA
Performance |
| Timeline |
| Coca Cola European |
| Prosegur Cash SA |
Coca Cola and Prosegur Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Prosegur Cash
The main advantage of trading using opposite Coca Cola and Prosegur Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Prosegur Cash 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 Prosegur Cash will offset losses from the drop in Prosegur Cash's long position.| Coca Cola vs. All Iron Re | Coca Cola vs. Plasticos Compuestos SA | Coca Cola vs. Arrienda Rental Properties | Coca Cola vs. Arteche Lantegi Elkartea |
| Prosegur Cash vs. Aedas Homes SL | Prosegur Cash vs. Ebro Foods | Prosegur Cash vs. Cellnex Telecom SA | Prosegur Cash vs. Hispanotels Inversiones SOCIMI |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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