Correlation Between Coca Cola and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Coca Cola 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 Coca Cola and Coca Cola 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 Coca Cola Consolidated, you can compare the effects of market volatilities on Coca Cola 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 Coca Cola with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Coca Cola.
Diversification Opportunities for Coca Cola and Coca Cola
Poor diversification
The 3 months correlation between Coca and Coca is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola European Partners 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 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 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 Coca Cola i.e., Coca Cola and Coca Cola go up and down completely randomly.
Pair Corralation between Coca Cola and Coca Cola
Given the investment horizon of 90 days Coca Cola is expected to generate 2.3 times less return on investment than Coca Cola. But when comparing it to its historical volatility, Coca Cola European Partners is 1.94 times less risky than Coca Cola. It trades about 0.09 of its potential returns per unit of risk. Coca Cola Consolidated is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 50,834 in Coca Cola Consolidated on August 27, 2024 and sell it today you would earn a total of 75,158 from holding Coca Cola Consolidated or generate 147.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola European Partners vs. Coca Cola Consolidated
Performance |
| Timeline |
| Coca Cola European |
| Coca Cola Consolidated |
Coca Cola and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Coca Cola
The main advantage of trading using opposite Coca Cola and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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.| Coca Cola vs. Vita Coco | Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Embotelladora Andina SA | Coca Cola vs. National Beverage Corp |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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