Correlation Between Coca Cola and Argent Mid
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Argent Mid 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 Argent Mid 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 Argent Mid Cap, you can compare the effects of market volatilities on Coca Cola and Argent Mid 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 Argent Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Argent Mid.
Diversification Opportunities for Coca Cola and Argent Mid
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and Argent is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Argent Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argent Mid Cap 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 Argent Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argent Mid Cap has no effect on the direction of Coca Cola i.e., Coca Cola and Argent Mid go up and down completely randomly.
Pair Corralation between Coca Cola and Argent Mid
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Argent Mid. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 1.42 times less risky than Argent Mid. The stock trades about -0.06 of its potential returns per unit of risk. The Argent Mid Cap is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 3,478 in Argent Mid Cap on September 1, 2024 and sell it today you would earn a total of 267.00 from holding Argent Mid Cap or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Coca Cola vs. Argent Mid Cap
Performance |
| Timeline |
| Coca Cola |
| Argent Mid Cap |
Coca Cola and Argent Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Argent Mid
The main advantage of trading using opposite Coca Cola and Argent Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Argent Mid 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 Argent Mid will offset losses from the drop in Argent Mid's long position.| Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Embotelladora Andina SA | Coca Cola vs. National Beverage Corp | Coca Cola vs. Embotelladora Andina SA |
| Argent Mid vs. NGL Energy Partners | Argent Mid vs. Martin Midstream Partners | Argent Mid vs. Delek Logistics Partners |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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