Correlation Between Coca Cola and Guided Therapeutics
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Guided Therapeutics 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 Guided Therapeutics 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 Guided Therapeutics, you can compare the effects of market volatilities on Coca Cola and Guided Therapeutics 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 Guided Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Guided Therapeutics.
Diversification Opportunities for Coca Cola and Guided Therapeutics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and Guided is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Guided Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guided Therapeutics 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 Guided Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guided Therapeutics has no effect on the direction of Coca Cola i.e., Coca Cola and Guided Therapeutics go up and down completely randomly.
Pair Corralation between Coca Cola and Guided Therapeutics
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Guided Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 16.31 times less risky than Guided Therapeutics. The stock trades about -0.06 of its potential returns per unit of risk. The Guided Therapeutics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Guided Therapeutics on September 1, 2024 and sell it today you would lose (1.00) from holding Guided Therapeutics or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Coca Cola vs. Guided Therapeutics
Performance |
| Timeline |
| Coca Cola |
| Guided Therapeutics |
Coca Cola and Guided Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Guided Therapeutics
The main advantage of trading using opposite Coca Cola and Guided Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Guided Therapeutics 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 Guided Therapeutics will offset losses from the drop in Guided Therapeutics' long position.| Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. National Beverage Corp | Coca Cola vs. Embotelladora Andina SA |
| Guided Therapeutics vs. Nephros | Guided Therapeutics vs. Intelgenx Technologs | Guided Therapeutics vs. SANUWAVE Health | Guided Therapeutics vs. Spectrascience New |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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