Correlation Between IRSA Inversiones and Coca Cola
Can any of the company-specific risk be diversified away by investing in both IRSA Inversiones 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 IRSA Inversiones and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IRSA Inversiones y and The Coca Cola, you can compare the effects of market volatilities on IRSA Inversiones 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 IRSA Inversiones with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRSA Inversiones and Coca Cola.
Diversification Opportunities for IRSA Inversiones and Coca Cola
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IRSA and Coca is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding IRSA Inversiones y and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and IRSA Inversiones 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 IRSA Inversiones y 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 IRSA Inversiones i.e., IRSA Inversiones and Coca Cola go up and down completely randomly.
Pair Corralation between IRSA Inversiones and Coca Cola
Assuming the 90 days trading horizon IRSA Inversiones y is expected to under-perform the Coca Cola. In addition to that, IRSA Inversiones is 1.73 times more volatile than The Coca Cola. It trades about -0.02 of its total potential returns per unit of risk. The Coca Cola is currently generating about 0.13 per unit of volatility. If you would invest 1,455,000 in The Coca Cola on November 2, 2024 and sell it today you would earn a total of 55,000 from holding The Coca Cola or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IRSA Inversiones y vs. The Coca Cola
Performance |
| Timeline |
| IRSA Inversiones y |
| Coca Cola |
IRSA Inversiones and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IRSA Inversiones and Coca Cola
The main advantage of trading using opposite IRSA Inversiones and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRSA Inversiones 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.| IRSA Inversiones vs. Agrometal SAI | IRSA Inversiones vs. Harmony Gold Mining | IRSA Inversiones vs. Telecom Argentina | IRSA Inversiones vs. United States Steel |
| Coca Cola vs. Grimoldi SA | Coca Cola vs. Transportadora de Gas | Coca Cola vs. Alphabet Inc Class A CEDEAR | Coca Cola vs. International Business Machines |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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