Correlation Between FlexShopper and Coca Cola
Can any of the company-specific risk be diversified away by investing in both FlexShopper 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 FlexShopper and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShopper and Coca Cola Femsa SAB, you can compare the effects of market volatilities on FlexShopper 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 FlexShopper with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShopper and Coca Cola.
Diversification Opportunities for FlexShopper and Coca Cola
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FlexShopper and Coca is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding FlexShopper and Coca Cola Femsa SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Femsa and FlexShopper 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 FlexShopper 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 Femsa has no effect on the direction of FlexShopper i.e., FlexShopper and Coca Cola go up and down completely randomly.
Pair Corralation between FlexShopper and Coca Cola
Given the investment horizon of 90 days FlexShopper is expected to generate 3.14 times more return on investment than Coca Cola. However, FlexShopper is 3.14 times more volatile than Coca Cola Femsa SAB. It trades about 0.04 of its potential returns per unit of risk. Coca Cola Femsa SAB is currently generating about 0.01 per unit of risk. If you would invest 143.00 in FlexShopper on August 28, 2024 and sell it today you would earn a total of 34.00 from holding FlexShopper or generate 23.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FlexShopper vs. Coca Cola Femsa SAB
Performance |
| Timeline |
| FlexShopper |
| Coca Cola Femsa |
FlexShopper and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShopper and Coca Cola
The main advantage of trading using opposite FlexShopper and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShopper 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.| FlexShopper vs. AZN Capital Corp | FlexShopper vs. Fortress Transportation and | FlexShopper vs. Ashtead Gro | FlexShopper vs. Alta Equipment Group |
| Coca Cola vs. Fomento Economico Mexicano | Coca Cola vs. Grupo Televisa SAB | Coca Cola vs. Grupo Aeroportuario del | Coca Cola vs. Grupo Aeroportuario del |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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