Correlation Between Coca Cola and Aquagold International
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Aquagold International 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 Aquagold International 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 Aquagold International, you can compare the effects of market volatilities on Coca Cola and Aquagold International 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 Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Aquagold International.
Diversification Opportunities for Coca Cola and Aquagold International
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Coca and Aquagold is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International 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 Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of Coca Cola i.e., Coca Cola and Aquagold International go up and down completely randomly.
Pair Corralation between Coca Cola and Aquagold International
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.04 times more return on investment than Aquagold International. However, The Coca Cola is 25.18 times less risky than Aquagold International. It trades about -0.18 of its potential returns per unit of risk. Aquagold International is currently generating about -0.23 per unit of risk. If you would invest 6,260 in The Coca Cola on October 9, 2024 and sell it today you would lose (179.00) from holding The Coca Cola or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Aquagold International
Performance |
| Timeline |
| Coca Cola |
| Aquagold International |
Coca Cola and Aquagold International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Aquagold International
The main advantage of trading using opposite Coca Cola and Aquagold International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Aquagold International 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 Aquagold International will offset losses from the drop in Aquagold International's long position.| Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. Aquagold International | Coca Cola vs. Morningstar Unconstrained Allocation | Coca Cola vs. Thrivent High Yield |
| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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