Correlation Between Coca Cola and Acorda Therapeutics
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Acorda Therapeutics 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 Acorda Therapeutics 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 Acorda Therapeutics, you can compare the effects of market volatilities on Coca Cola and Acorda Therapeutics 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 Acorda Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Acorda Therapeutics.
Diversification Opportunities for Coca Cola and Acorda Therapeutics
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca and Acorda is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Acorda Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acorda Therapeutics 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 Acorda Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acorda Therapeutics has no effect on the direction of Coca Cola i.e., Coca Cola and Acorda Therapeutics go up and down completely randomly.
Pair Corralation between Coca Cola and Acorda Therapeutics
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 28.56 times less return on investment than Acorda Therapeutics. But when comparing it to its historical volatility, The Coca Cola is 10.43 times less risky than Acorda Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Acorda Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,150 in Acorda Therapeutics on August 30, 2024 and sell it today you would earn a total of 470.00 from holding Acorda Therapeutics or generate 40.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.31% |
| Values | Daily Returns |
The Coca Cola vs. Acorda Therapeutics
Performance |
| Timeline |
| Coca Cola |
| Acorda Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coca Cola and Acorda Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Acorda Therapeutics
The main advantage of trading using opposite Coca Cola and Acorda Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Acorda Therapeutics 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 Acorda Therapeutics will offset losses from the drop in Acorda Therapeutics' long position.| Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola European Partners | Coca Cola vs. Capital Income Builder | Coca Cola vs. Direxion Daily FTSE |
| Acorda Therapeutics vs. Shionogi Co | Acorda Therapeutics vs. Pacira BioSciences, | Acorda Therapeutics vs. Sunshine Biopharma Warrant | Acorda Therapeutics vs. Biofrontera |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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