Correlation Between Coca Cola and Bayview Acquisition
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Bayview Acquisition 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 Bayview Acquisition 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 Bayview Acquisition Corp, you can compare the effects of market volatilities on Coca Cola and Bayview Acquisition 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 Bayview Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Bayview Acquisition.
Diversification Opportunities for Coca Cola and Bayview Acquisition
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca and Bayview is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Consolidated and Bayview Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayview Acquisition Corp 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 Bayview Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayview Acquisition Corp has no effect on the direction of Coca Cola i.e., Coca Cola and Bayview Acquisition go up and down completely randomly.
Pair Corralation between Coca Cola and Bayview Acquisition
Given the investment horizon of 90 days Coca Cola Consolidated is expected to under-perform the Bayview Acquisition. In addition to that, Coca Cola is 3.46 times more volatile than Bayview Acquisition Corp. It trades about -0.01 of its total potential returns per unit of risk. Bayview Acquisition Corp is currently generating about 0.08 per unit of volatility. If you would invest 1,052 in Bayview Acquisition Corp on September 2, 2024 and sell it today you would earn a total of 28.00 from holding Bayview Acquisition Corp or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola Consolidated vs. Bayview Acquisition Corp
Performance |
| Timeline |
| Coca Cola Consolidated |
| Bayview Acquisition Corp |
Coca Cola and Bayview Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Bayview Acquisition
The main advantage of trading using opposite Coca Cola and Bayview Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Bayview Acquisition 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 Bayview Acquisition will offset losses from the drop in Bayview Acquisition'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 |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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