Correlation Between Vita Coco and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Vita Coco 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 Vita Coco and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vita Coco and Coca Cola Consolidated, you can compare the effects of market volatilities on Vita Coco 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 Vita Coco with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vita Coco and Coca Cola.
Diversification Opportunities for Vita Coco and Coca Cola
Very weak diversification
The 3 months correlation between Vita and Coca is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and Coca Cola Consolidated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Consolidated and Vita Coco 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 Vita Coco 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 Consolidated has no effect on the direction of Vita Coco i.e., Vita Coco and Coca Cola go up and down completely randomly.
Pair Corralation between Vita Coco and Coca Cola
Given the investment horizon of 90 days Vita Coco is expected to generate 1.23 times more return on investment than Coca Cola. However, Vita Coco is 1.23 times more volatile than Coca Cola Consolidated. It trades about 0.21 of its potential returns per unit of risk. Coca Cola Consolidated is currently generating about 0.03 per unit of risk. If you would invest 2,488 in Vita Coco on November 2, 2024 and sell it today you would earn a total of 1,320 from holding Vita Coco or generate 53.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vita Coco vs. Coca Cola Consolidated
Performance |
| Timeline |
| Vita Coco |
| Coca Cola Consolidated |
Vita Coco and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vita Coco and Coca Cola
The main advantage of trading using opposite Vita Coco and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vita Coco 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.| Vita Coco vs. Coca Cola Femsa SAB | Vita Coco vs. Coca Cola European Partners | Vita Coco vs. Embotelladora Andina SA | Vita Coco vs. Monster Beverage Corp |
| Coca Cola vs. The Coca Cola | Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Keurig Dr Pepper |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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