Correlation Between Coca Cola and Amplify CWP
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Amplify CWP 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 Amplify CWP 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 Amplify CWP Enhanced, you can compare the effects of market volatilities on Coca Cola and Amplify CWP 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 Amplify CWP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Amplify CWP.
Diversification Opportunities for Coca Cola and Amplify CWP
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and Amplify is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Amplify CWP Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify CWP Enhanced 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 Amplify CWP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify CWP Enhanced has no effect on the direction of Coca Cola i.e., Coca Cola and Amplify CWP go up and down completely randomly.
Pair Corralation between Coca Cola and Amplify CWP
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Amplify CWP. In addition to that, Coca Cola is 1.21 times more volatile than Amplify CWP Enhanced. It trades about -0.09 of its total potential returns per unit of risk. Amplify CWP Enhanced is currently generating about 0.42 per unit of volatility. If you would invest 4,010 in Amplify CWP Enhanced on September 4, 2024 and sell it today you would earn a total of 251.00 from holding Amplify CWP Enhanced or generate 6.26% 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. Amplify CWP Enhanced
Performance |
| Timeline |
| Coca Cola |
| Amplify CWP Enhanced |
Coca Cola and Amplify CWP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Amplify CWP
The main advantage of trading using opposite Coca Cola and Amplify CWP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Amplify CWP 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 Amplify CWP will offset losses from the drop in Amplify CWP'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 |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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