Correlation Between Coca Cola and Altitude Acquisition
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Altitude Acquisition 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 Altitude Acquisition 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 Altitude Acquisition Corp, you can compare the effects of market volatilities on Coca Cola and Altitude Acquisition 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 Altitude Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Altitude Acquisition.
Diversification Opportunities for Coca Cola and Altitude Acquisition
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coca and Altitude is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Altitude Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altitude Acquisition Corp 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 Altitude Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altitude Acquisition Corp has no effect on the direction of Coca Cola i.e., Coca Cola and Altitude Acquisition go up and down completely randomly.
Pair Corralation between Coca Cola and Altitude Acquisition
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 3.85 times more return on investment than Altitude Acquisition. However, Coca Cola is 3.85 times more volatile than Altitude Acquisition Corp. It trades about 0.04 of its potential returns per unit of risk. Altitude Acquisition Corp is currently generating about -0.04 per unit of risk. If you would invest 5,722 in The Coca Cola on August 31, 2024 and sell it today you would earn a total of 686.00 from holding The Coca Cola or generate 11.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 8.56% |
| Values | Daily Returns |
The Coca Cola vs. Altitude Acquisition Corp
Performance |
| Timeline |
| Coca Cola |
| Altitude Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coca Cola and Altitude Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Altitude Acquisition
The main advantage of trading using opposite Coca Cola and Altitude Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Altitude Acquisition 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 Altitude Acquisition will offset losses from the drop in Altitude Acquisition's long position.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. RLJ Lodging Trust | Coca Cola vs. Aquagold International | Coca Cola vs. Stepstone Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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