Correlation Between Coca Cola and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Coca Cola 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 Coca Cola and Coca Cola 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 Coca Cola European Partners, you can compare the effects of market volatilities on Coca Cola 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 Coca Cola with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Coca Cola.
Diversification Opportunities for Coca Cola and Coca Cola
Poor diversification
The 3 months correlation between Coca and Coca is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Consolidated and Coca Cola European Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola European 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 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 European has no effect on the direction of Coca Cola i.e., Coca Cola and Coca Cola go up and down completely randomly.
Pair Corralation between Coca Cola and Coca Cola
Given the investment horizon of 90 days Coca Cola Consolidated is expected to generate 1.88 times more return on investment than Coca Cola. However, Coca Cola is 1.88 times more volatile than Coca Cola European Partners. It trades about 0.1 of its potential returns per unit of risk. Coca Cola European Partners is currently generating about 0.07 per unit of risk. If you would invest 65,004 in Coca Cola Consolidated on August 27, 2024 and sell it today you would earn a total of 60,988 from holding Coca Cola Consolidated or generate 93.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola Consolidated vs. Coca Cola European Partners
Performance |
| Timeline |
| Coca Cola Consolidated |
| Coca Cola European |
Coca Cola and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Coca Cola
The main advantage of trading using opposite Coca Cola and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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.| Coca Cola vs. The Coca Cola | Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Keurig Dr Pepper |
| Coca Cola vs. Vita Coco | Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Embotelladora Andina SA | Coca Cola vs. National Beverage Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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