Correlation Between Coca Cola and Lassonde Industries
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Lassonde Industries 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 Lassonde Industries 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 Lassonde Industries, you can compare the effects of market volatilities on Coca Cola and Lassonde Industries 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 Lassonde Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Lassonde Industries.
Diversification Opportunities for Coca Cola and Lassonde Industries
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coca and Lassonde is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Consolidated and Lassonde Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lassonde Industries 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 Lassonde Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lassonde Industries has no effect on the direction of Coca Cola i.e., Coca Cola and Lassonde Industries go up and down completely randomly.
Pair Corralation between Coca Cola and Lassonde Industries
Given the investment horizon of 90 days Coca Cola Consolidated is expected to generate 1.41 times more return on investment than Lassonde Industries. However, Coca Cola is 1.41 times more volatile than Lassonde Industries. It trades about 0.07 of its potential returns per unit of risk. Lassonde Industries is currently generating about -0.01 per unit of risk. If you would invest 123,058 in Coca Cola Consolidated on August 27, 2024 and sell it today you would earn a total of 2,934 from holding Coca Cola Consolidated or generate 2.38% 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. Lassonde Industries
Performance |
| Timeline |
| Coca Cola Consolidated |
| Lassonde Industries |
Coca Cola and Lassonde Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Lassonde Industries
The main advantage of trading using opposite Coca Cola and Lassonde Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Lassonde Industries 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 Lassonde Industries will offset losses from the drop in Lassonde Industries' 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 |
| Lassonde Industries vs. PepsiCo | Lassonde Industries vs. Coca Cola Consolidated | Lassonde Industries vs. Monster Beverage Corp | Lassonde Industries vs. Celsius Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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