Correlation Between Coca Cola and Atlantic Wind
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Atlantic Wind 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 Atlantic Wind 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 Atlantic Wind Solar, you can compare the effects of market volatilities on Coca Cola and Atlantic Wind 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 Atlantic Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Atlantic Wind.
Diversification Opportunities for Coca Cola and Atlantic Wind
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coca and Atlantic is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Atlantic Wind Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Wind Solar 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 Atlantic Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Wind Solar has no effect on the direction of Coca Cola i.e., Coca Cola and Atlantic Wind go up and down completely randomly.
Pair Corralation between Coca Cola and Atlantic Wind
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.13 times more return on investment than Atlantic Wind. However, The Coca Cola is 7.85 times less risky than Atlantic Wind. It trades about -0.12 of its potential returns per unit of risk. Atlantic Wind Solar is currently generating about -0.1 per unit of risk. If you would invest 6,592 in The Coca Cola on August 31, 2024 and sell it today you would lose (149.00) from holding The Coca Cola or give up 2.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Atlantic Wind Solar
Performance |
| Timeline |
| Coca Cola |
| Atlantic Wind Solar |
Coca Cola and Atlantic Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Atlantic Wind
The main advantage of trading using opposite Coca Cola and Atlantic Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Atlantic Wind 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 Atlantic Wind will offset losses from the drop in Atlantic Wind's long position.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. RLJ Lodging Trust | Coca Cola vs. Aquagold International | Coca Cola vs. Stepstone Group |
| Atlantic Wind vs. Green Stream Holdings | Atlantic Wind vs. VirExit Technologies | Atlantic Wind vs. Clean Vision Corp | Atlantic Wind vs. SolarWindow Technologies |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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