Correlation Between Coca Cola and Coastal Carolina
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Coastal Carolina 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 Coastal Carolina 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 Coastal Carolina Bancshares, you can compare the effects of market volatilities on Coca Cola and Coastal Carolina 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 Coastal Carolina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Coastal Carolina.
Diversification Opportunities for Coca Cola and Coastal Carolina
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Coastal is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Coastal Carolina Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Carolina Ban 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 Coastal Carolina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Carolina Ban has no effect on the direction of Coca Cola i.e., Coca Cola and Coastal Carolina go up and down completely randomly.
Pair Corralation between Coca Cola and Coastal Carolina
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 3.75 times less return on investment than Coastal Carolina. But when comparing it to its historical volatility, The Coca Cola is 1.26 times less risky than Coastal Carolina. It trades about 0.04 of its potential returns per unit of risk. Coastal Carolina Bancshares is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 945.00 in Coastal Carolina Bancshares on August 29, 2024 and sell it today you would earn a total of 156.00 from holding Coastal Carolina Bancshares or generate 16.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Coastal Carolina Bancshares
Performance |
| Timeline |
| Coca Cola |
| Coastal Carolina Ban |
Coca Cola and Coastal Carolina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Coastal Carolina
The main advantage of trading using opposite Coca Cola and Coastal Carolina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Coastal Carolina 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 Coastal Carolina will offset losses from the drop in Coastal Carolina's long position.| Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola European Partners | Coca Cola vs. Capital Income Builder | Coca Cola vs. Direxion Daily FTSE |
| Coastal Carolina vs. First Bankers Trustshares | Coastal Carolina vs. Greenville Federal Financial | Coastal Carolina vs. First Ottawa Bancshares | Coastal Carolina vs. Citizens Bancorp Investment |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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