Correlation Between Keurig Dr and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Keurig Dr 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 Keurig Dr and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keurig Dr Pepper and Coca Cola FEMSA SAB, you can compare the effects of market volatilities on Keurig Dr 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 Keurig Dr with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Coca Cola.
Diversification Opportunities for Keurig Dr and Coca Cola
Poor diversification
The 3 months correlation between Keurig and Coca is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper 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 Keurig Dr 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 Keurig Dr Pepper 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 Keurig Dr i.e., Keurig Dr and Coca Cola go up and down completely randomly.
Pair Corralation between Keurig Dr and Coca Cola
Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Coca Cola. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 4.7 times less risky than Coca Cola. The stock trades about -0.04 of its potential returns per unit of risk. The Coca Cola FEMSA SAB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 820.00 in Coca Cola FEMSA SAB on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Coca Cola FEMSA SAB or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keurig Dr Pepper vs. Coca Cola FEMSA SAB
Performance |
| Timeline |
| Keurig Dr Pepper |
| Coca Cola FEMSA |
Keurig Dr and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and Coca Cola
The main advantage of trading using opposite Keurig Dr and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr 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.| Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Vita Coco | Keurig Dr vs. PepsiCo | Keurig Dr vs. Coca Cola Femsa SAB |
| Coca Cola vs. Greene Concepts | Coca Cola vs. Fbec Worldwide | Coca Cola vs. National Beverage Corp | Coca Cola vs. Vita Coco |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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