Correlation Between Coca-Cola FEMSA and SIVERS SEMICONDUCTORS
Can any of the company-specific risk be diversified away by investing in both Coca-Cola FEMSA and SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS AB, you can compare the effects of market volatilities on Coca-Cola FEMSA and SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca-Cola FEMSA and SIVERS SEMICONDUCTORS.
Diversification Opportunities for Coca-Cola FEMSA and SIVERS SEMICONDUCTORS
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coca-Cola and SIVERS is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola FEMSA SAB and SIVERS SEMICONDUCTORS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIVERS SEMICONDUCTORS has no effect on the direction of Coca-Cola FEMSA i.e., Coca-Cola FEMSA and SIVERS SEMICONDUCTORS go up and down completely randomly.
Pair Corralation between Coca-Cola FEMSA and SIVERS SEMICONDUCTORS
Assuming the 90 days trading horizon Coca Cola FEMSA SAB is expected to generate 0.13 times more return on investment than SIVERS SEMICONDUCTORS. However, Coca Cola FEMSA SAB is 7.45 times less risky than SIVERS SEMICONDUCTORS. It trades about -0.18 of its potential returns per unit of risk. SIVERS SEMICONDUCTORS AB is currently generating about -0.26 per unit of risk. If you would invest 7,800 in Coca Cola FEMSA SAB on August 24, 2024 and sell it today you would lose (450.00) from holding Coca Cola FEMSA SAB or give up 5.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola FEMSA SAB vs. SIVERS SEMICONDUCTORS AB
Performance |
| Timeline |
| Coca Cola FEMSA |
| SIVERS SEMICONDUCTORS |
Coca-Cola FEMSA and SIVERS SEMICONDUCTORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca-Cola FEMSA and SIVERS SEMICONDUCTORS
The main advantage of trading using opposite Coca-Cola FEMSA and SIVERS SEMICONDUCTORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca-Cola FEMSA position performs unexpectedly, SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS will offset losses from the drop in SIVERS SEMICONDUCTORS's long position.| Coca-Cola FEMSA vs. Fast Retailing Co | Coca-Cola FEMSA vs. Cleanaway Waste Management | Coca-Cola FEMSA vs. COSTCO WHOLESALE CDR | Coca-Cola FEMSA vs. Vastned Retail NV |
| SIVERS SEMICONDUCTORS vs. BII Railway Transportation | SIVERS SEMICONDUCTORS vs. Sporttotal AG | SIVERS SEMICONDUCTORS vs. CNVISION MEDIA | SIVERS SEMICONDUCTORS vs. Townsquare Media |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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