Correlation Between Coca Cola and ESH Acquisition
Can any of the company-specific risk be diversified away by investing in both Coca Cola and ESH Acquisition 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 ESH Acquisition 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 ESH Acquisition Corp, you can compare the effects of market volatilities on Coca Cola and ESH Acquisition 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 ESH Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and ESH Acquisition.
Diversification Opportunities for Coca Cola and ESH Acquisition
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and ESH is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and ESH Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESH Acquisition Corp 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 ESH Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESH Acquisition Corp has no effect on the direction of Coca Cola i.e., Coca Cola and ESH Acquisition go up and down completely randomly.
Pair Corralation between Coca Cola and ESH Acquisition
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the ESH Acquisition. In addition to that, Coca Cola is 3.81 times more volatile than ESH Acquisition Corp. It trades about -0.2 of its total potential returns per unit of risk. ESH Acquisition Corp is currently generating about 0.15 per unit of volatility. If you would invest 1,057 in ESH Acquisition Corp on September 12, 2024 and sell it today you would earn a total of 23.00 from holding ESH Acquisition Corp or generate 2.18% 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. ESH Acquisition Corp
Performance |
| Timeline |
| Coca Cola |
| ESH Acquisition Corp |
Coca Cola and ESH Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and ESH Acquisition
The main advantage of trading using opposite Coca Cola and ESH Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, ESH Acquisition 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 ESH Acquisition will offset losses from the drop in ESH Acquisition'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 |
| ESH Acquisition vs. HUMANA INC | ESH Acquisition vs. Barloworld Ltd ADR | ESH Acquisition vs. Morningstar Unconstrained Allocation | ESH Acquisition vs. Thrivent High Yield |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |