Correlation Between Coca Cola and Cornerstone Strategic
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Cornerstone Strategic 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 Cornerstone Strategic 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 Cornerstone Strategic Return, you can compare the effects of market volatilities on Coca Cola and Cornerstone Strategic 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 Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Cornerstone Strategic.
Diversification Opportunities for Coca Cola and Cornerstone Strategic
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Cornerstone is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic 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 Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Coca Cola i.e., Coca Cola and Cornerstone Strategic go up and down completely randomly.
Pair Corralation between Coca Cola and Cornerstone Strategic
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Cornerstone Strategic. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 1.14 times less risky than Cornerstone Strategic. The stock trades about -0.17 of its potential returns per unit of risk. The Cornerstone Strategic Return is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 833.00 in Cornerstone Strategic Return on August 28, 2024 and sell it today you would earn a total of 82.00 from holding Cornerstone Strategic Return or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Cornerstone Strategic Return
Performance |
| Timeline |
| Coca Cola |
| Cornerstone Strategic |
Coca Cola and Cornerstone Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Cornerstone Strategic
The main advantage of trading using opposite Coca Cola and Cornerstone Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Cornerstone Strategic 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 Cornerstone Strategic will offset losses from the drop in Cornerstone Strategic'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 |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |