Correlation Between Coca Cola and Emerging Europe
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Emerging Europe 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 Emerging Europe 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 Emerging Europe Fund, you can compare the effects of market volatilities on Coca Cola and Emerging Europe 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 Emerging Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Emerging Europe.
Diversification Opportunities for Coca Cola and Emerging Europe
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Emerging is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Emerging Europe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Europe 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 Emerging Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Europe has no effect on the direction of Coca Cola i.e., Coca Cola and Emerging Europe go up and down completely randomly.
Pair Corralation between Coca Cola and Emerging Europe
If you would invest 6,387 in The Coca Cola on November 28, 2024 and sell it today you would earn a total of 762.00 from holding The Coca Cola or generate 11.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
The Coca Cola vs. Emerging Europe Fund
Performance |
| Timeline |
| Coca Cola |
| Emerging Europe |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Coca Cola and Emerging Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Emerging Europe
The main advantage of trading using opposite Coca Cola and Emerging Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Emerging Europe 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 Emerging Europe will offset losses from the drop in Emerging Europe's long position.| Coca Cola vs. Vita Coco | Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. PepsiCo | Coca Cola vs. Coca Cola Femsa SAB |
| Emerging Europe vs. Aqr Sustainable Long Short | Emerging Europe vs. Fidelity Flex Servative | Emerging Europe vs. Transam Short Term Bond | Emerging Europe vs. Touchstone Ultra Short |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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