Correlation Between Coca Cola and Grupo Televisa
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Grupo Televisa 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 Grupo Televisa 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 Grupo Televisa SAB, you can compare the effects of market volatilities on Coca Cola and Grupo Televisa 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 Grupo Televisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Grupo Televisa.
Diversification Opportunities for Coca Cola and Grupo Televisa
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coca and Grupo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Grupo Televisa SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Televisa SAB 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 Grupo Televisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Televisa SAB has no effect on the direction of Coca Cola i.e., Coca Cola and Grupo Televisa go up and down completely randomly.
Pair Corralation between Coca Cola and Grupo Televisa
Assuming the 90 days horizon The Coca Cola is expected to generate 0.32 times more return on investment than Grupo Televisa. However, The Coca Cola is 3.09 times less risky than Grupo Televisa. It trades about 0.16 of its potential returns per unit of risk. Grupo Televisa SAB is currently generating about 0.02 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Grupo Televisa SAB
Performance |
| Timeline |
| Coca Cola |
| Grupo Televisa SAB |
Coca Cola and Grupo Televisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Grupo Televisa
The main advantage of trading using opposite Coca Cola and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Grupo Televisa 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 Grupo Televisa will offset losses from the drop in Grupo Televisa'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 |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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