Correlation Between Coca Cola and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Equity, you can compare the effects of market volatilities on Coca Cola and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Goldman Sachs.
Diversification Opportunities for Coca Cola and Goldman Sachs
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Goldman is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Goldman Sachs Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Equity 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Equity has no effect on the direction of Coca Cola i.e., Coca Cola and Goldman Sachs go up and down completely randomly.
Pair Corralation between Coca Cola and Goldman Sachs
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Goldman Sachs. In addition to that, Coca Cola is 1.5 times more volatile than Goldman Sachs Equity. It trades about -0.17 of its total potential returns per unit of risk. Goldman Sachs Equity is currently generating about 0.18 per unit of volatility. If you would invest 1,776 in Goldman Sachs Equity on August 28, 2024 and sell it today you would earn a total of 41.00 from holding Goldman Sachs Equity or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Goldman Sachs Equity
Performance |
| Timeline |
| Coca Cola |
| Goldman Sachs Equity |
Coca Cola and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Goldman Sachs
The main advantage of trading using opposite Coca Cola and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' 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 |
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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