Correlation Between Coca Cola and Gigas Hosting
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Gigas Hosting 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 Gigas Hosting 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 Gigas Hosting SA, you can compare the effects of market volatilities on Coca Cola and Gigas Hosting 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 Gigas Hosting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Gigas Hosting.
Diversification Opportunities for Coca Cola and Gigas Hosting
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Coca and Gigas is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola European Partners and Gigas Hosting SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigas Hosting 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 Gigas Hosting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigas Hosting SA has no effect on the direction of Coca Cola i.e., Coca Cola and Gigas Hosting go up and down completely randomly.
Pair Corralation between Coca Cola and Gigas Hosting
Assuming the 90 days trading horizon Coca Cola European Partners is expected to generate 1.03 times more return on investment than Gigas Hosting. However, Coca Cola is 1.03 times more volatile than Gigas Hosting SA. It trades about 0.25 of its potential returns per unit of risk. Gigas Hosting SA is currently generating about -0.06 per unit of risk. If you would invest 6,847 in Coca Cola European Partners on September 3, 2024 and sell it today you would earn a total of 633.00 from holding Coca Cola European Partners or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola European Partners vs. Gigas Hosting SA
Performance |
| Timeline |
| Coca Cola European |
| Gigas Hosting SA |
Coca Cola and Gigas Hosting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Gigas Hosting
The main advantage of trading using opposite Coca Cola and Gigas Hosting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Gigas Hosting 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 Gigas Hosting will offset losses from the drop in Gigas Hosting's long position.| Coca Cola vs. Labiana Health SA | Coca Cola vs. Tier1 Technology SA | Coca Cola vs. Home Capital Rentals | Coca Cola vs. Technomeca Aerospace SA |
| Gigas Hosting vs. Metrovacesa SA | Gigas Hosting vs. Endurance Motive SA | Gigas Hosting vs. Elecnor SA | Gigas Hosting vs. Mapfre |
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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