Correlation Between Coca-Cola FEMSA and AAC TECHNOLOGHLDGADR
Can any of the company-specific risk be diversified away by investing in both Coca-Cola FEMSA and AAC TECHNOLOGHLDGADR 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 FEMSA and AAC TECHNOLOGHLDGADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola FEMSA SAB and AAC TECHNOLOGHLDGADR, you can compare the effects of market volatilities on Coca-Cola FEMSA and AAC TECHNOLOGHLDGADR 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 FEMSA with a short position of AAC TECHNOLOGHLDGADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca-Cola FEMSA and AAC TECHNOLOGHLDGADR.
Diversification Opportunities for Coca-Cola FEMSA and AAC TECHNOLOGHLDGADR
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca-Cola and AAC is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola FEMSA SAB and AAC TECHNOLOGHLDGADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC TECHNOLOGHLDGADR and Coca-Cola FEMSA 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 FEMSA SAB are associated (or correlated) with AAC TECHNOLOGHLDGADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC TECHNOLOGHLDGADR has no effect on the direction of Coca-Cola FEMSA i.e., Coca-Cola FEMSA and AAC TECHNOLOGHLDGADR go up and down completely randomly.
Pair Corralation between Coca-Cola FEMSA and AAC TECHNOLOGHLDGADR
Assuming the 90 days trading horizon Coca-Cola FEMSA is expected to generate 16.52 times less return on investment than AAC TECHNOLOGHLDGADR. But when comparing it to its historical volatility, Coca Cola FEMSA SAB is 1.22 times less risky than AAC TECHNOLOGHLDGADR. It trades about 0.02 of its potential returns per unit of risk. AAC TECHNOLOGHLDGADR is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 360.00 in AAC TECHNOLOGHLDGADR on September 13, 2024 and sell it today you would earn a total of 90.00 from holding AAC TECHNOLOGHLDGADR or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola FEMSA SAB vs. AAC TECHNOLOGHLDGADR
Performance |
| Timeline |
| Coca Cola FEMSA |
| AAC TECHNOLOGHLDGADR |
Coca-Cola FEMSA and AAC TECHNOLOGHLDGADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca-Cola FEMSA and AAC TECHNOLOGHLDGADR
The main advantage of trading using opposite Coca-Cola FEMSA and AAC TECHNOLOGHLDGADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca-Cola FEMSA position performs unexpectedly, AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR will offset losses from the drop in AAC TECHNOLOGHLDGADR's long position.| Coca-Cola FEMSA vs. Xenia Hotels Resorts | Coca-Cola FEMSA vs. RETAIL FOOD GROUP | Coca-Cola FEMSA vs. Host Hotels Resorts | Coca-Cola FEMSA vs. Summit Hotel Properties |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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