Correlation Between Coca Cola and IShares Core
Can any of the company-specific risk be diversified away by investing in both Coca Cola and IShares Core 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 IShares Core 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 iShares Core Dividend, you can compare the effects of market volatilities on Coca Cola and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and IShares Core.
Diversification Opportunities for Coca Cola and IShares Core
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and IShares is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and iShares Core Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Dividend 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Dividend has no effect on the direction of Coca Cola i.e., Coca Cola and IShares Core go up and down completely randomly.
Pair Corralation between Coca Cola and IShares Core
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 1.83 times more return on investment than IShares Core. However, Coca Cola is 1.83 times more volatile than iShares Core Dividend. It trades about 0.17 of its potential returns per unit of risk. iShares Core Dividend is currently generating about -0.1 per unit of risk. If you would invest 6,139 in The Coca Cola on September 18, 2024 and sell it today you would earn a total of 201.00 from holding The Coca Cola or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. iShares Core Dividend
Performance |
| Timeline |
| Coca Cola |
| iShares Core Dividend |
Coca Cola and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and IShares Core
The main advantage of trading using opposite Coca Cola and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.| Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Embotelladora Andina SA | Coca Cola vs. Coca Cola European Partners | Coca Cola vs. Coca Cola Consolidated |
| IShares Core vs. iShares Core High | IShares Core vs. Schwab Dividend Equity | IShares Core vs. ProShares SP 500 | IShares Core vs. Invesco SP 500 |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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