Correlation Between Coca Cola and Airgain
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Airgain 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 Airgain 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 Airgain, you can compare the effects of market volatilities on Coca Cola and Airgain 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 Airgain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Airgain.
Diversification Opportunities for Coca Cola and Airgain
Pay attention - limited upside
The 3 months correlation between Coca and Airgain is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Airgain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airgain 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 Airgain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airgain has no effect on the direction of Coca Cola i.e., Coca Cola and Airgain go up and down completely randomly.
Pair Corralation between Coca Cola and Airgain
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.28 times more return on investment than Airgain. However, The Coca Cola is 3.53 times less risky than Airgain. It trades about -0.17 of its potential returns per unit of risk. Airgain is currently generating about -0.1 per unit of risk. If you would invest 6,667 in The Coca Cola on August 28, 2024 and sell it today you would lose (229.00) from holding The Coca Cola or give up 3.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Airgain
Performance |
| Timeline |
| Coca Cola |
| Airgain |
Coca Cola and Airgain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Airgain
The main advantage of trading using opposite Coca Cola and Airgain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Airgain 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 Airgain will offset losses from the drop in Airgain's long position.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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