Correlation Between Eve Holding and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Eve Holding 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 Eve Holding and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eve Holding and Coca Cola Consolidated, you can compare the effects of market volatilities on Eve Holding 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 Eve Holding with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eve Holding and Coca Cola.
Diversification Opportunities for Eve Holding and Coca Cola
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eve and Coca is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Eve Holding and Coca Cola Consolidated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Consolidated and Eve Holding 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 Eve Holding 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 Consolidated has no effect on the direction of Eve Holding i.e., Eve Holding and Coca Cola go up and down completely randomly.
Pair Corralation between Eve Holding and Coca Cola
Given the investment horizon of 90 days Eve Holding is expected to under-perform the Coca Cola. In addition to that, Eve Holding is 1.71 times more volatile than Coca Cola Consolidated. It trades about -0.03 of its total potential returns per unit of risk. Coca Cola Consolidated is currently generating about 0.1 per unit of volatility. If you would invest 47,509 in Coca Cola Consolidated on August 24, 2024 and sell it today you would earn a total of 78,483 from holding Coca Cola Consolidated or generate 165.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eve Holding vs. Coca Cola Consolidated
Performance |
| Timeline |
| Eve Holding |
| Coca Cola Consolidated |
Eve Holding and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eve Holding and Coca Cola
The main advantage of trading using opposite Eve Holding and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eve Holding 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.| Eve Holding vs. Coca Cola Consolidated | Eve Holding vs. Koppers Holdings | Eve Holding vs. Coca Cola Femsa SAB | Eve Holding vs. Know Labs |
| Coca Cola vs. The Coca Cola | Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Keurig Dr Pepper |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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