Correlation Between Coca Cola and Atomic Minerals
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Atomic Minerals 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 Atomic Minerals 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 Atomic Minerals, you can compare the effects of market volatilities on Coca Cola and Atomic Minerals 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 Atomic Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Atomic Minerals.
Diversification Opportunities for Coca Cola and Atomic Minerals
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca and Atomic is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Atomic Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atomic Minerals 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 Atomic Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atomic Minerals has no effect on the direction of Coca Cola i.e., Coca Cola and Atomic Minerals go up and down completely randomly.
Pair Corralation between Coca Cola and Atomic Minerals
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.09 times more return on investment than Atomic Minerals. However, The Coca Cola is 11.35 times less risky than Atomic Minerals. It trades about -0.04 of its potential returns per unit of risk. Atomic Minerals is currently generating about -0.3 per unit of risk. If you would invest 6,462 in The Coca Cola on September 3, 2024 and sell it today you would lose (54.00) from holding The Coca Cola or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
The Coca Cola vs. Atomic Minerals
Performance |
| Timeline |
| Coca Cola |
| Atomic Minerals |
Coca Cola and Atomic Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Atomic Minerals
The main advantage of trading using opposite Coca Cola and Atomic Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Atomic Minerals 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 Atomic Minerals will offset losses from the drop in Atomic Minerals' 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 |
| Atomic Minerals vs. Legacy Education | Atomic Minerals vs. Apple Inc | Atomic Minerals vs. NVIDIA | Atomic Minerals vs. Microsoft |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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