Correlation Between Coca Cola and Augusta Gold
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Augusta Gold 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 Augusta Gold 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 Augusta Gold Corp, you can compare the effects of market volatilities on Coca Cola and Augusta Gold 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 Augusta Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Augusta Gold.
Diversification Opportunities for Coca Cola and Augusta Gold
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and Augusta is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Augusta Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Augusta Gold 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 Augusta Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Augusta Gold Corp has no effect on the direction of Coca Cola i.e., Coca Cola and Augusta Gold go up and down completely randomly.
Pair Corralation between Coca Cola and Augusta Gold
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 5.86 times less return on investment than Augusta Gold. But when comparing it to its historical volatility, The Coca Cola is 6.41 times less risky than Augusta Gold. It trades about 0.07 of its potential returns per unit of risk. Augusta Gold Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 61.00 in Augusta Gold Corp on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Augusta Gold Corp or generate 49.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Augusta Gold Corp
Performance |
| Timeline |
| Coca Cola |
| Augusta Gold Corp |
Coca Cola and Augusta Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Augusta Gold
The main advantage of trading using opposite Coca Cola and Augusta Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Augusta Gold 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 Augusta Gold will offset losses from the drop in Augusta Gold's long position.| Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. National Beverage Corp | Coca Cola vs. Embotelladora Andina SA |
| Augusta Gold vs. Artemis Gold | Augusta Gold vs. North Peak Resources | Augusta Gold vs. Amex Exploration | Augusta Gold vs. Brixton Metals |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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