Correlation Between Coca-Cola FEMSA and Uni President
Can any of the company-specific risk be diversified away by investing in both Coca-Cola FEMSA and Uni President 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 Uni President 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 Uni President China Holdings, you can compare the effects of market volatilities on Coca-Cola FEMSA and Uni President 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 Uni President. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca-Cola FEMSA and Uni President.
Diversification Opportunities for Coca-Cola FEMSA and Uni President
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Coca-Cola and Uni is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola FEMSA SAB and Uni President China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uni President China 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 Uni President. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uni President China has no effect on the direction of Coca-Cola FEMSA i.e., Coca-Cola FEMSA and Uni President go up and down completely randomly.
Pair Corralation between Coca-Cola FEMSA and Uni President
Assuming the 90 days trading horizon Coca-Cola FEMSA is expected to generate 7.9 times less return on investment than Uni President. But when comparing it to its historical volatility, Coca Cola FEMSA SAB is 5.27 times less risky than Uni President. It trades about 0.03 of its potential returns per unit of risk. Uni President China Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 76.00 in Uni President China Holdings on September 4, 2024 and sell it today you would earn a total of 2.00 from holding Uni President China Holdings or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola FEMSA SAB vs. Uni President China Holdings
Performance |
| Timeline |
| Coca Cola FEMSA |
| Uni President China |
Coca-Cola FEMSA and Uni President Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca-Cola FEMSA and Uni President
The main advantage of trading using opposite Coca-Cola FEMSA and Uni President positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca-Cola FEMSA position performs unexpectedly, Uni President 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 Uni President will offset losses from the drop in Uni President's long position.| Coca-Cola FEMSA vs. PepsiCo | Coca-Cola FEMSA vs. Monster Beverage Corp | Coca-Cola FEMSA vs. Coca Cola European Partners | Coca-Cola FEMSA vs. COCA A HBC |
| Uni President vs. PepsiCo | Uni President vs. Monster Beverage Corp | Uni President vs. Coca Cola European Partners | Uni President 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |