Correlation Between Coca Cola and Condor Petroleum
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Condor Petroleum 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 Condor Petroleum 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 Condor Petroleum, you can compare the effects of market volatilities on Coca Cola and Condor Petroleum 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 Condor Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Condor Petroleum.
Diversification Opportunities for Coca Cola and Condor Petroleum
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Condor is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Condor Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Condor Petroleum 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 Condor Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Condor Petroleum has no effect on the direction of Coca Cola i.e., Coca Cola and Condor Petroleum go up and down completely randomly.
Pair Corralation between Coca Cola and Condor Petroleum
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 14.66 times less return on investment than Condor Petroleum. But when comparing it to its historical volatility, The Coca Cola is 14.45 times less risky than Condor Petroleum. It trades about 0.06 of its potential returns per unit of risk. Condor Petroleum is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 124.00 in Condor Petroleum on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Condor Petroleum or generate 32.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
The Coca Cola vs. Condor Petroleum
Performance |
| Timeline |
| Coca Cola |
| Condor Petroleum |
Coca Cola and Condor Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Condor Petroleum
The main advantage of trading using opposite Coca Cola and Condor Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Condor Petroleum 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 Condor Petroleum will offset losses from the drop in Condor Petroleum'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 |
| Condor Petroleum vs. Yamaha Motor Co | Condor Petroleum vs. Nitto Denko Corp | Condor Petroleum vs. Farmers Merchants Bancorp | Condor Petroleum vs. Furukawa Electric Co |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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