Correlation Between Cohu and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Cohu 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 Cohu and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohu Inc and Coca Cola Femsa SAB, you can compare the effects of market volatilities on Cohu 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 Cohu with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohu and Coca Cola.
Diversification Opportunities for Cohu and Coca Cola
Very good diversification
The 3 months correlation between Cohu and Coca is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cohu Inc and Coca Cola Femsa SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Femsa and Cohu 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 Cohu Inc 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 Femsa has no effect on the direction of Cohu i.e., Cohu and Coca Cola go up and down completely randomly.
Pair Corralation between Cohu and Coca Cola
Given the investment horizon of 90 days Cohu Inc is expected to under-perform the Coca Cola. In addition to that, Cohu is 1.48 times more volatile than Coca Cola Femsa SAB. It trades about -0.03 of its total potential returns per unit of risk. Coca Cola Femsa SAB is currently generating about 0.01 per unit of volatility. If you would invest 7,990 in Coca Cola Femsa SAB on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Coca Cola Femsa SAB or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohu Inc vs. Coca Cola Femsa SAB
Performance |
| Timeline |
| Cohu Inc |
| Coca Cola Femsa |
Cohu and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohu and Coca Cola
The main advantage of trading using opposite Cohu and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohu 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.| Cohu vs. Onto Innovation | Cohu vs. Photronics | Cohu vs. Ultra Clean Holdings | Cohu vs. Axcelis Technologies |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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