Correlation Between Coca Cola and BrainChip Holdings
Can any of the company-specific risk be diversified away by investing in both Coca Cola and BrainChip Holdings 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 BrainChip Holdings 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 BrainChip Holdings, you can compare the effects of market volatilities on Coca Cola and BrainChip Holdings 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 BrainChip Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and BrainChip Holdings.
Diversification Opportunities for Coca Cola and BrainChip Holdings
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and BrainChip is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and BrainChip Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrainChip Holdings 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 BrainChip Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrainChip Holdings has no effect on the direction of Coca Cola i.e., Coca Cola and BrainChip Holdings go up and down completely randomly.
Pair Corralation between Coca Cola and BrainChip Holdings
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the BrainChip Holdings. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 7.29 times less risky than BrainChip Holdings. The stock trades about -0.06 of its potential returns per unit of risk. The BrainChip Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 577.00 in BrainChip Holdings on September 1, 2024 and sell it today you would earn a total of 65.00 from holding BrainChip Holdings or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. BrainChip Holdings
Performance |
| Timeline |
| Coca Cola |
| BrainChip Holdings |
Coca Cola and BrainChip Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and BrainChip Holdings
The main advantage of trading using opposite Coca Cola and BrainChip Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, BrainChip Holdings 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 BrainChip Holdings will offset losses from the drop in BrainChip Holdings' long position.| Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. National Beverage Corp | Coca Cola vs. Embotelladora Andina SA |
| BrainChip Holdings vs. Power Integrations | BrainChip Holdings vs. MACOM Technology Solutions | BrainChip Holdings vs. Intchains Group Limited | BrainChip Holdings vs. Vishay Intertechnology |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |