Correlation Between Coca Cola and Entera Bio
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Entera Bio 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 Entera Bio 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 Entera Bio, you can compare the effects of market volatilities on Coca Cola and Entera Bio 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 Entera Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Entera Bio.
Diversification Opportunities for Coca Cola and Entera Bio
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coca and Entera is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Entera Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entera Bio 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 Entera Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entera Bio has no effect on the direction of Coca Cola i.e., Coca Cola and Entera Bio go up and down completely randomly.
Pair Corralation between Coca Cola and Entera Bio
If you would invest 0.12 in Entera Bio on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Entera Bio or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
The Coca Cola vs. Entera Bio
Performance |
| Timeline |
| Coca Cola |
| Entera Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coca Cola and Entera Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Entera Bio
The main advantage of trading using opposite Coca Cola and Entera Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Entera Bio 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 Entera Bio will offset losses from the drop in Entera Bio's long position.| Coca Cola vs. Vita Coco | Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Embotelladora Andina SA | Coca Cola vs. National Beverage Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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