Correlation Between IShares Core and Coca Cola
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 IShares Core and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and The Coca Cola, you can compare the effects of market volatilities on IShares Core 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 IShares Core with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Coca Cola.
Diversification Opportunities for IShares Core and Coca Cola
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Coca is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and IShares Core 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 iShares Core MSCI 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 has no effect on the direction of IShares Core i.e., IShares Core and Coca Cola go up and down completely randomly.
Pair Corralation between IShares Core and Coca Cola
Given the investment horizon of 90 days iShares Core MSCI is expected to generate 1.11 times more return on investment than Coca Cola. However, IShares Core is 1.11 times more volatile than The Coca Cola. It trades about 0.06 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.01 per unit of risk. If you would invest 5,141 in iShares Core MSCI on September 13, 2024 and sell it today you would earn a total of 1,340 from holding iShares Core MSCI or generate 26.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. The Coca Cola
Performance |
| Timeline |
| iShares Core MSCI |
| Coca Cola |
IShares Core and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Coca Cola
The main advantage of trading using opposite IShares Core and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. Vanguard FTSE Pacific | IShares Core vs. abrdn Bloomberg All | IShares Core vs. BTCI | IShares Core vs. Intel |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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