Correlation Between Coca Cola and Central Puerto
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Central Puerto 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 Coca Cola and Central Puerto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and Central Puerto SA, you can compare the effects of market volatilities on Coca Cola and Central Puerto 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 Coca Cola with a short position of Central Puerto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Central Puerto.
Diversification Opportunities for Coca Cola and Central Puerto
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and Central is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Central Puerto SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Puerto SA and Coca Cola 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 The Coca Cola are associated (or correlated) with Central Puerto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Puerto SA has no effect on the direction of Coca Cola i.e., Coca Cola and Central Puerto go up and down completely randomly.
Pair Corralation between Coca Cola and Central Puerto
Assuming the 90 days horizon The Coca Cola is expected to generate 0.28 times more return on investment than Central Puerto. However, The Coca Cola is 3.58 times less risky than Central Puerto. It trades about 0.16 of its potential returns per unit of risk. Central Puerto SA is currently generating about -0.03 per unit of risk. If you would invest 1,450,000 in The Coca Cola on October 20, 2024 and sell it today you would earn a total of 40,000 from holding The Coca Cola or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Central Puerto SA
Performance |
| Timeline |
| Coca Cola |
| Central Puerto SA |
Coca Cola and Central Puerto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Central Puerto
The main advantage of trading using opposite Coca Cola and Central Puerto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Central Puerto 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 Central Puerto will offset losses from the drop in Central Puerto's long position.| Coca Cola vs. American Express Co | Coca Cola vs. Ledesma SAAI | Coca Cola vs. Central Puerto SA | Coca Cola vs. Aluar Aluminio Argentino |
| Central Puerto vs. Enel Generacion Costanera | Central Puerto vs. Edesa Holding SA | Central Puerto vs. Empresa Distribuidora Electrica |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |