Correlation Between Coca Cola and CMUV Bancorp
Can any of the company-specific risk be diversified away by investing in both Coca Cola and CMUV Bancorp 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 CMUV Bancorp 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 CMUV Bancorp, you can compare the effects of market volatilities on Coca Cola and CMUV Bancorp 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 CMUV Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and CMUV Bancorp.
Diversification Opportunities for Coca Cola and CMUV Bancorp
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca and CMUV is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and CMUV Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMUV Bancorp 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 CMUV Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMUV Bancorp has no effect on the direction of Coca Cola i.e., Coca Cola and CMUV Bancorp go up and down completely randomly.
Pair Corralation between Coca Cola and CMUV Bancorp
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 2.85 times less return on investment than CMUV Bancorp. But when comparing it to its historical volatility, The Coca Cola is 1.16 times less risky than CMUV Bancorp. It trades about 0.05 of its potential returns per unit of risk. CMUV Bancorp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,100 in CMUV Bancorp on November 4, 2024 and sell it today you would earn a total of 125.00 from holding CMUV Bancorp or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
The Coca Cola vs. CMUV Bancorp
Performance |
| Timeline |
| Coca Cola |
| CMUV Bancorp |
Coca Cola and CMUV Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and CMUV Bancorp
The main advantage of trading using opposite Coca Cola and CMUV Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, CMUV Bancorp 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 CMUV Bancorp will offset losses from the drop in CMUV Bancorp's 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 |
| CMUV Bancorp vs. Pioneer Bankcorp | CMUV Bancorp vs. Summit Bancshares | CMUV Bancorp vs. Liberty Northwest Bancorp | CMUV Bancorp vs. First Community |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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