Correlation Between Coca Cola and Aurinia Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals, you can compare the effects of market volatilities on Coca Cola and Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Aurinia Pharmaceuticals.
Diversification Opportunities for Coca Cola and Aurinia Pharmaceuticals
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coca and Aurinia is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Aurinia Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurinia Pharmaceuticals has no effect on the direction of Coca Cola i.e., Coca Cola and Aurinia Pharmaceuticals go up and down completely randomly.
Pair Corralation between Coca Cola and Aurinia Pharmaceuticals
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.54 times more return on investment than Aurinia Pharmaceuticals. However, The Coca Cola is 1.85 times less risky than Aurinia Pharmaceuticals. It trades about 0.11 of its potential returns per unit of risk. Aurinia Pharmaceuticals is currently generating about -0.19 per unit of risk. If you would invest 6,184 in The Coca Cola on November 3, 2024 and sell it today you would earn a total of 164.00 from holding The Coca Cola or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
The Coca Cola vs. Aurinia Pharmaceuticals
Performance |
| Timeline |
| Coca Cola |
| Aurinia Pharmaceuticals |
Coca Cola and Aurinia Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Aurinia Pharmaceuticals
The main advantage of trading using opposite Coca Cola and Aurinia Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals will offset losses from the drop in Aurinia Pharmaceuticals' 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 |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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