Correlation Between Coca Cola and ACGR
Can any of the company-specific risk be diversified away by investing in both Coca Cola and ACGR 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 ACGR 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 ACGR, you can compare the effects of market volatilities on Coca Cola and ACGR 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 ACGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and ACGR.
Diversification Opportunities for Coca Cola and ACGR
Significant diversification
The 3 months correlation between Coca and ACGR is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and ACGR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACGR 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 ACGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACGR has no effect on the direction of Coca Cola i.e., Coca Cola and ACGR go up and down completely randomly.
Pair Corralation between Coca Cola and ACGR
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the ACGR. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 1.43 times less risky than ACGR. The stock trades about -0.12 of its potential returns per unit of risk. The ACGR is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,981 in ACGR on October 25, 2024 and sell it today you would lose (24.00) from holding ACGR or give up 0.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
The Coca Cola vs. ACGR
Performance |
Timeline |
Coca Cola |
ACGR |
Coca Cola and ACGR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and ACGR
The main advantage of trading using opposite Coca Cola and ACGR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, ACGR 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 ACGR will offset losses from the drop in ACGR's long position.Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Coca Cola Femsa SAB |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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