Correlation Between Coca Cola and Camtek
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Camtek 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 Camtek 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 Camtek, you can compare the effects of market volatilities on Coca Cola and Camtek 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 Camtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Camtek.
Diversification Opportunities for Coca Cola and Camtek
Good diversification
The 3 months correlation between Coca and Camtek is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Camtek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camtek 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 Camtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camtek has no effect on the direction of Coca Cola i.e., Coca Cola and Camtek go up and down completely randomly.
Pair Corralation between Coca Cola and Camtek
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.35 times more return on investment than Camtek. However, The Coca Cola is 2.89 times less risky than Camtek. It trades about 0.45 of its potential returns per unit of risk. Camtek is currently generating about -0.27 per unit of risk. If you would invest 6,192 in The Coca Cola on November 25, 2024 and sell it today you would earn a total of 943.00 from holding The Coca Cola or generate 15.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
The Coca Cola vs. Camtek
Performance |
Timeline |
Coca Cola |
Camtek |
Coca Cola and Camtek Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and Camtek
The main advantage of trading using opposite Coca Cola and Camtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Camtek 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 Camtek will offset losses from the drop in Camtek's long position.Coca Cola vs. Trustcash Holdings | ||
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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