Correlation Between Coca Cola and Exchange Listed
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Exchange Listed 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 Exchange Listed 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 Exchange Listed Funds, you can compare the effects of market volatilities on Coca Cola and Exchange Listed 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 Exchange Listed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Exchange Listed.
Diversification Opportunities for Coca Cola and Exchange Listed
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Exchange is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Exchange Listed Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Listed Funds 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 Exchange Listed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Listed Funds has no effect on the direction of Coca Cola i.e., Coca Cola and Exchange Listed go up and down completely randomly.
Pair Corralation between Coca Cola and Exchange Listed
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 3.62 times less return on investment than Exchange Listed. But when comparing it to its historical volatility, The Coca Cola is 1.23 times less risky than Exchange Listed. It trades about 0.04 of its potential returns per unit of risk. Exchange Listed Funds is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,781 in Exchange Listed Funds on September 1, 2024 and sell it today you would earn a total of 472.00 from holding Exchange Listed Funds or generate 16.97% 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. Exchange Listed Funds
Performance |
| Timeline |
| Coca Cola |
| Exchange Listed Funds |
Coca Cola and Exchange Listed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Exchange Listed
The main advantage of trading using opposite Coca Cola and Exchange Listed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Exchange Listed 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 Exchange Listed will offset losses from the drop in Exchange Listed's long position.| Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. National Beverage Corp | Coca Cola vs. Embotelladora Andina SA |
| Exchange Listed vs. Vanguard Total Stock | Exchange Listed vs. SPDR SP 500 | Exchange Listed vs. iShares Core SP | Exchange Listed vs. Vanguard Dividend Appreciation |
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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