Correlation Between Coca Cola and Fidelity Sustainable
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Fidelity Sustainable 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 Fidelity Sustainable 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 Fidelity Sustainable Core, you can compare the effects of market volatilities on Coca Cola and Fidelity Sustainable 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 Fidelity Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Fidelity Sustainable.
Diversification Opportunities for Coca Cola and Fidelity Sustainable
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coca and Fidelity is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Fidelity Sustainable Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sustainable Core 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 Fidelity Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sustainable Core has no effect on the direction of Coca Cola i.e., Coca Cola and Fidelity Sustainable go up and down completely randomly.
Pair Corralation between Coca Cola and Fidelity Sustainable
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 2.03 times more return on investment than Fidelity Sustainable. However, Coca Cola is 2.03 times more volatile than Fidelity Sustainable Core. It trades about 0.02 of its potential returns per unit of risk. Fidelity Sustainable Core is currently generating about 0.03 per unit of risk. If you would invest 5,802 in The Coca Cola on October 7, 2024 and sell it today you would earn a total of 373.00 from holding The Coca Cola or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Fidelity Sustainable Core
Performance |
| Timeline |
| Coca Cola |
| Fidelity Sustainable Core |
Coca Cola and Fidelity Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Fidelity Sustainable
The main advantage of trading using opposite Coca Cola and Fidelity Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Fidelity Sustainable 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 Fidelity Sustainable will offset losses from the drop in Fidelity Sustainable's long position.| Coca Cola vs. Aquagold International | Coca Cola vs. Alibaba Group Holding | Coca Cola vs. Banco Bradesco SA | Coca Cola vs. HP Inc |
| Fidelity Sustainable vs. Fidelity Sustainable Low | Fidelity Sustainable vs. Fidelity Investment Grade | Fidelity Sustainable vs. Fidelity Investment Grade | Fidelity Sustainable vs. Fidelity Sustainable High |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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