Correlation Between Coca Cola and B Communications
Can any of the company-specific risk be diversified away by investing in both Coca Cola and B Communications 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 B Communications 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 B Communications, you can compare the effects of market volatilities on Coca Cola and B Communications 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 B Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and B Communications.
Diversification Opportunities for Coca Cola and B Communications
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Coca and BCOMF is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and B Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Communications 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 B Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Communications has no effect on the direction of Coca Cola i.e., Coca Cola and B Communications go up and down completely randomly.
Pair Corralation between Coca Cola and B Communications
If you would invest 5,722 in The Coca Cola on August 31, 2024 and sell it today you would earn a total of 686.00 from holding The Coca Cola or generate 11.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.27% |
| Values | Daily Returns |
The Coca Cola vs. B Communications
Performance |
| Timeline |
| Coca Cola |
| B Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coca Cola and B Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and B Communications
The main advantage of trading using opposite Coca Cola and B Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, B Communications 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 B Communications will offset losses from the drop in B Communications' long position.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. RLJ Lodging Trust | Coca Cola vs. Aquagold International | Coca Cola vs. Stepstone Group |
| B Communications vs. Montauk Renewables | B Communications vs. Aegon NV ADR | B Communications vs. Link Real Estate | B Communications vs. Bank of America |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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