Correlation Between Coca Cola and General American
Can any of the company-specific risk be diversified away by investing in both Coca Cola and General American 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 General American 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 General American Investors, you can compare the effects of market volatilities on Coca Cola and General American 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 General American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and General American.
Diversification Opportunities for Coca Cola and General American
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Coca and General is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and General American Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General American Inv 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 General American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General American Inv has no effect on the direction of Coca Cola i.e., Coca Cola and General American go up and down completely randomly.
Pair Corralation between Coca Cola and General American
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 2.89 times more return on investment than General American. However, Coca Cola is 2.89 times more volatile than General American Investors. It trades about 0.29 of its potential returns per unit of risk. General American Investors is currently generating about 0.01 per unit of risk. If you would invest 6,271 in The Coca Cola on November 18, 2024 and sell it today you would earn a total of 616.00 from holding The Coca Cola or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. General American Investors
Performance |
| Timeline |
| Coca Cola |
| General American Inv |
Coca Cola and General American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and General American
The main advantage of trading using opposite Coca Cola and General American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, General American 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 General American will offset losses from the drop in General American's long position.| Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Coca Cola European Partners | Coca Cola vs. Vita Coco |
| General American vs. Blackrock Muniyield | General American vs. Allianzgi Equity Convertible | General American vs. MFS Investment Grade | General American vs. Eaton Vance National |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |