Correlation Between Coca Cola and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Eaton Vance 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 Eaton Vance 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 Eaton Vance Enhanced, you can compare the effects of market volatilities on Coca Cola and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Eaton Vance.
Diversification Opportunities for Coca Cola and Eaton Vance
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Eaton is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Eaton Vance Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Enhanced has no effect on the direction of Coca Cola i.e., Coca Cola and Eaton Vance go up and down completely randomly.
Pair Corralation between Coca Cola and Eaton Vance
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 7.86 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, The Coca Cola is 1.24 times less risky than Eaton Vance. It trades about 0.02 of its potential returns per unit of risk. Eaton Vance Enhanced is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,028 in Eaton Vance Enhanced on September 5, 2024 and sell it today you would earn a total of 338.00 from holding Eaton Vance Enhanced or generate 16.67% 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. Eaton Vance Enhanced
Performance |
| Timeline |
| Coca Cola |
| Eaton Vance Enhanced |
Coca Cola and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Eaton Vance
The main advantage of trading using opposite Coca Cola and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance'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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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