Correlation Between Coca Cola and Consumer Staples
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Consumer Staples 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 Consumer Staples 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 Consumer Staples Portfolio, you can compare the effects of market volatilities on Coca Cola and Consumer Staples 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 Consumer Staples. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Consumer Staples.
Diversification Opportunities for Coca Cola and Consumer Staples
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coca and Consumer is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Consumer Staples Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Staples Por 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 Consumer Staples. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Staples Por has no effect on the direction of Coca Cola i.e., Coca Cola and Consumer Staples go up and down completely randomly.
Pair Corralation between Coca Cola and Consumer Staples
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Consumer Staples. In addition to that, Coca Cola is 1.29 times more volatile than Consumer Staples Portfolio. It trades about -0.03 of its total potential returns per unit of risk. Consumer Staples Portfolio is currently generating about 0.3 per unit of volatility. If you would invest 9,535 in Consumer Staples Portfolio on September 2, 2024 and sell it today you would earn a total of 394.00 from holding Consumer Staples Portfolio or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Consumer Staples Portfolio
Performance |
| Timeline |
| Coca Cola |
| Consumer Staples Por |
Coca Cola and Consumer Staples Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Consumer Staples
The main advantage of trading using opposite Coca Cola and Consumer Staples positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Consumer Staples 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 Consumer Staples will offset losses from the drop in Consumer Staples' 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 |
| Consumer Staples vs. Fidelity Advisor Health | Consumer Staples vs. Fidelity Advisor Biotechnology | Consumer Staples vs. Materials Portfolio Fidelity | Consumer Staples vs. Consumer Staples Portfolio |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |