Correlation Between Coca Cola and Mermeren Kombinat
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Mermeren Kombinat 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 Mermeren Kombinat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola HBC AG and Mermeren Kombinat AD, you can compare the effects of market volatilities on Coca Cola and Mermeren Kombinat 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 Mermeren Kombinat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Mermeren Kombinat.
Diversification Opportunities for Coca Cola and Mermeren Kombinat
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca and Mermeren is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola HBC AG and Mermeren Kombinat AD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mermeren Kombinat 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 HBC AG are associated (or correlated) with Mermeren Kombinat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mermeren Kombinat has no effect on the direction of Coca Cola i.e., Coca Cola and Mermeren Kombinat go up and down completely randomly.
Pair Corralation between Coca Cola and Mermeren Kombinat
Assuming the 90 days trading horizon Coca Cola is expected to generate 1.34 times less return on investment than Mermeren Kombinat. But when comparing it to its historical volatility, Coca Cola HBC AG is 3.58 times less risky than Mermeren Kombinat. It trades about 0.15 of its potential returns per unit of risk. Mermeren Kombinat AD is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,280 in Mermeren Kombinat AD on August 28, 2024 and sell it today you would earn a total of 140.00 from holding Mermeren Kombinat AD or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola HBC AG vs. Mermeren Kombinat AD
Performance |
| Timeline |
| Coca Cola HBC |
| Mermeren Kombinat |
Coca Cola and Mermeren Kombinat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Mermeren Kombinat
The main advantage of trading using opposite Coca Cola and Mermeren Kombinat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Mermeren Kombinat 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 Mermeren Kombinat will offset losses from the drop in Mermeren Kombinat's long position.| Coca Cola vs. National Bank of | Coca Cola vs. N Leventeris SA | Coca Cola vs. Eurobank Ergasias Services | Coca Cola vs. Vogiatzoglou Systems SA |
| Mermeren Kombinat vs. National Bank of | Mermeren Kombinat vs. EL D Mouzakis | Mermeren Kombinat vs. Lampsa Hellenic Hotels | Mermeren Kombinat vs. Eurobank Ergasias Services |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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