Correlation Between Coca Cola and Callinex Mines
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Callinex Mines 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 Callinex Mines 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 Callinex Mines, you can compare the effects of market volatilities on Coca Cola and Callinex Mines 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 Callinex Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Callinex Mines.
Diversification Opportunities for Coca Cola and Callinex Mines
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coca and Callinex is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Callinex Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callinex Mines 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 Callinex Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callinex Mines has no effect on the direction of Coca Cola i.e., Coca Cola and Callinex Mines go up and down completely randomly.
Pair Corralation between Coca Cola and Callinex Mines
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.43 times more return on investment than Callinex Mines. However, The Coca Cola is 2.35 times less risky than Callinex Mines. It trades about 0.19 of its potential returns per unit of risk. Callinex Mines is currently generating about -0.21 per unit of risk. If you would invest 6,081 in The Coca Cola on November 5, 2024 and sell it today you would earn a total of 267.00 from holding The Coca Cola or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Callinex Mines
Performance |
| Timeline |
| Coca Cola |
| Callinex Mines |
Coca Cola and Callinex Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Callinex Mines
The main advantage of trading using opposite Coca Cola and Callinex Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Callinex Mines 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 Callinex Mines will offset losses from the drop in Callinex Mines' 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 |
| Callinex Mines vs. West Mining Corp | Callinex Mines vs. Flying Nickel Mining | Callinex Mines vs. Forum Energy Metals | Callinex Mines vs. Jourdan Resources |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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