Correlation Between Coca Cola and Signet International
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Signet International 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 and Signet International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola Consolidated and Signet International Holdings, you can compare the effects of market volatilities on Coca Cola and Signet International 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 with a short position of Signet International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Signet International.
Diversification Opportunities for Coca Cola and Signet International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Signet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Consolidated and Signet International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signet International and Coca Cola 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 Consolidated are associated (or correlated) with Signet International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signet International has no effect on the direction of Coca Cola i.e., Coca Cola and Signet International go up and down completely randomly.
Pair Corralation between Coca Cola and Signet International
If you would invest 114,362 in Coca Cola Consolidated on September 3, 2024 and sell it today you would earn a total of 16,067 from holding Coca Cola Consolidated or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola Consolidated vs. Signet International Holdings
Performance |
| Timeline |
| Coca Cola Consolidated |
| Signet International |
Coca Cola and Signet International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Signet International
The main advantage of trading using opposite Coca Cola and Signet International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Signet International 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 Signet International will offset losses from the drop in Signet International's long position.| Coca Cola vs. The Coca Cola | Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Keurig Dr Pepper |
| Signet International vs. Embotelladora Andina SA | Signet International vs. PT Astra International | Signet International vs. Apple Rush | Signet International vs. Embotelladora Andina SA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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