Correlation Between Compagnie Plastic and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic 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 Compagnie Plastic and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and Coca Cola HBC, you can compare the effects of market volatilities on Compagnie Plastic 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 Compagnie Plastic with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Coca Cola.
Diversification Opportunities for Compagnie Plastic and Coca Cola
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compagnie and Coca is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Coca Cola HBC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola HBC and Compagnie Plastic 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 Compagnie Plastic Omnium 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 HBC has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Coca Cola go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Coca Cola
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to under-perform the Coca Cola. In addition to that, Compagnie Plastic is 1.6 times more volatile than Coca Cola HBC. It trades about -0.03 of its total potential returns per unit of risk. Coca Cola HBC is currently generating about 0.08 per unit of volatility. If you would invest 2,583 in Coca Cola HBC on September 3, 2024 and sell it today you would earn a total of 801.00 from holding Coca Cola HBC or generate 31.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Coca Cola HBC
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Coca Cola HBC |
Compagnie Plastic and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Coca Cola
The main advantage of trading using opposite Compagnie Plastic and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic 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.| Compagnie Plastic vs. Dno ASA | Compagnie Plastic vs. PT Astra International | Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings |
| Coca Cola vs. AEON STORES | Coca Cola vs. Darden Restaurants | Coca Cola vs. COSTCO WHOLESALE CDR | Coca Cola vs. BURLINGTON STORES |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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