Correlation Between Coca Cola and General New
Can any of the company-specific risk be diversified away by investing in both Coca Cola and General New 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 New 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 New York, you can compare the effects of market volatilities on Coca Cola and General New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and General New.
Diversification Opportunities for Coca Cola and General New
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and General is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and General New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General New York 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General New York has no effect on the direction of Coca Cola i.e., Coca Cola and General New go up and down completely randomly.
Pair Corralation between Coca Cola and General New
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 5.21 times more return on investment than General New. However, Coca Cola is 5.21 times more volatile than General New York. It trades about 0.03 of its potential returns per unit of risk. General New York is currently generating about 0.08 per unit of risk. If you would invest 5,772 in The Coca Cola on September 12, 2024 and sell it today you would earn a total of 489.50 from holding The Coca Cola or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.96% |
| Values | Daily Returns |
The Coca Cola vs. General New York
Performance |
| Timeline |
| Coca Cola |
| General New York |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coca Cola and General New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and General New
The main advantage of trading using opposite Coca Cola and General New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, General New 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 New will offset losses from the drop in General New'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 |
| General New vs. Janus Global Technology | General New vs. Hennessy Technology Fund | General New vs. Global Technology Portfolio | General New vs. Invesco Technology Fund |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stocks Directory Find actively traded stocks across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |