Correlation Between Coca Cola and Croghan Bancshares
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Croghan Bancshares 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 Croghan Bancshares 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 Croghan Bancshares, you can compare the effects of market volatilities on Coca Cola and Croghan Bancshares 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 Croghan Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Croghan Bancshares.
Diversification Opportunities for Coca Cola and Croghan Bancshares
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Croghan is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Croghan Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Croghan Bancshares 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 Croghan Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Croghan Bancshares has no effect on the direction of Coca Cola i.e., Coca Cola and Croghan Bancshares go up and down completely randomly.
Pair Corralation between Coca Cola and Croghan Bancshares
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 1.18 times less return on investment than Croghan Bancshares. But when comparing it to its historical volatility, The Coca Cola is 1.6 times less risky than Croghan Bancshares. It trades about 0.06 of its potential returns per unit of risk. Croghan Bancshares is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,488 in Croghan Bancshares on September 3, 2024 and sell it today you would earn a total of 502.00 from holding Croghan Bancshares or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.04% |
| Values | Daily Returns |
The Coca Cola vs. Croghan Bancshares
Performance |
| Timeline |
| Coca Cola |
| Croghan Bancshares |
Coca Cola and Croghan Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Croghan Bancshares
The main advantage of trading using opposite Coca Cola and Croghan Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Croghan Bancshares 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 Croghan Bancshares will offset losses from the drop in Croghan Bancshares' long position.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
| Croghan Bancshares vs. PGE Corp | Croghan Bancshares vs. Empresa Distribuidora y | Croghan Bancshares vs. Artisan Partners Asset | Croghan Bancshares vs. WEC Energy Group |
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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