Correlation Between Coca Cola and Global X
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Global X 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 Global X 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 Global X Adaptive, you can compare the effects of market volatilities on Coca Cola and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Global X.
Diversification Opportunities for Coca Cola and Global X
Pay attention - limited upside
The 3 months correlation between Coca and Global is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Global X Adaptive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Adaptive 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Adaptive has no effect on the direction of Coca Cola i.e., Coca Cola and Global X go up and down completely randomly.
Pair Corralation between Coca Cola and Global X
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 3.08 times less return on investment than Global X. In addition to that, Coca Cola is 1.12 times more volatile than Global X Adaptive. It trades about 0.04 of its total potential returns per unit of risk. Global X Adaptive is currently generating about 0.14 per unit of volatility. If you would invest 3,925 in Global X Adaptive on September 1, 2024 and sell it today you would earn a total of 570.00 from holding Global X Adaptive or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
The Coca Cola vs. Global X Adaptive
Performance |
| Timeline |
| Coca Cola |
| Global X Adaptive |
Coca Cola and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Global X
The main advantage of trading using opposite Coca Cola and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. National Beverage Corp | Coca Cola vs. Embotelladora Andina SA |
| Global X vs. Vanguard Mid Cap Value | Global X vs. SPDR SP Dividend | Global X vs. Pacer Cash Cows | Global X vs. iShares SP Mid Cap |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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