Correlation Between CF Industries and Coca Cola
Can any of the company-specific risk be diversified away by investing in both CF Industries 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 CF Industries and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Industries Holdings and The Coca Cola, you can compare the effects of market volatilities on CF Industries 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 CF Industries with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Coca Cola.
Diversification Opportunities for CF Industries and Coca Cola
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CF Industries and Coca is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and CF Industries 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 CF Industries Holdings 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 has no effect on the direction of CF Industries i.e., CF Industries and Coca Cola go up and down completely randomly.
Pair Corralation between CF Industries and Coca Cola
Allowing for the 90-day total investment horizon CF Industries is expected to generate 3.66 times less return on investment than Coca Cola. In addition to that, CF Industries is 2.27 times more volatile than The Coca Cola. It trades about 0.0 of its total potential returns per unit of risk. The Coca Cola is currently generating about 0.02 per unit of volatility. If you would invest 5,985 in The Coca Cola on August 30, 2024 and sell it today you would earn a total of 458.00 from holding The Coca Cola or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Industries Holdings vs. The Coca Cola
Performance |
| Timeline |
| CF Industries Holdings |
| Coca Cola |
CF Industries and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Coca Cola
The main advantage of trading using opposite CF Industries and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries 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.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. PepsiCo | Coca Cola vs. Coca Cola Femsa SAB |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |