Correlation Between Coca Cola and Ford Otomotiv
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Ford Otomotiv 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 Ford Otomotiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola Icecek AS and Ford Otomotiv Sanayi, you can compare the effects of market volatilities on Coca Cola and Ford Otomotiv 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 Ford Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Ford Otomotiv.
Diversification Opportunities for Coca Cola and Ford Otomotiv
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and Ford is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Icecek AS and Ford Otomotiv Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Otomotiv Sanayi 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 Icecek AS are associated (or correlated) with Ford Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Otomotiv Sanayi has no effect on the direction of Coca Cola i.e., Coca Cola and Ford Otomotiv go up and down completely randomly.
Pair Corralation between Coca Cola and Ford Otomotiv
Assuming the 90 days trading horizon Coca Cola Icecek AS is expected to under-perform the Ford Otomotiv. In addition to that, Coca Cola is 1.0 times more volatile than Ford Otomotiv Sanayi. It trades about -0.02 of its total potential returns per unit of risk. Ford Otomotiv Sanayi is currently generating about 0.01 per unit of volatility. If you would invest 100,078 in Ford Otomotiv Sanayi on August 26, 2024 and sell it today you would earn a total of 22.00 from holding Ford Otomotiv Sanayi or generate 0.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola Icecek AS vs. Ford Otomotiv Sanayi
Performance |
| Timeline |
| Coca Cola Icecek |
| Ford Otomotiv Sanayi |
Coca Cola and Ford Otomotiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Ford Otomotiv
The main advantage of trading using opposite Coca Cola and Ford Otomotiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Ford Otomotiv 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 Ford Otomotiv will offset losses from the drop in Ford Otomotiv's long position.| Coca Cola vs. Is Yatirim Ortakligi | Coca Cola vs. Creditwest Faktoring AS | Coca Cola vs. Turk Telekomunikasyon AS | Coca Cola vs. Aygaz AS |
| Ford Otomotiv vs. Qnb Finansbank AS | Ford Otomotiv vs. Kent Gida Maddeleri | Ford Otomotiv vs. QNB Finans Finansal | Ford Otomotiv vs. Turkiye Kalkinma Bankasi |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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