Correlation Between Coca Cola and Amg Gwk
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Amg Gwk 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 Amg Gwk 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 Amg Gwk Small, you can compare the effects of market volatilities on Coca Cola and Amg Gwk 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 Amg Gwk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Amg Gwk.
Diversification Opportunities for Coca Cola and Amg Gwk
Pay attention - limited upside
The 3 months correlation between Coca and Amg is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Amg Gwk Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk Small 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 Amg Gwk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Gwk Small has no effect on the direction of Coca Cola i.e., Coca Cola and Amg Gwk go up and down completely randomly.
Pair Corralation between Coca Cola and Amg Gwk
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 2.47 times less return on investment than Amg Gwk. But when comparing it to its historical volatility, The Coca Cola is 1.47 times less risky than Amg Gwk. It trades about 0.06 of its potential returns per unit of risk. Amg Gwk Small is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,732 in Amg Gwk Small on August 24, 2024 and sell it today you would earn a total of 910.00 from holding Amg Gwk Small or generate 33.31% 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. Amg Gwk Small
Performance |
| Timeline |
| Coca Cola |
| Amg Gwk Small |
Coca Cola and Amg Gwk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Amg Gwk
The main advantage of trading using opposite Coca Cola and Amg Gwk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Amg Gwk 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 Amg Gwk will offset losses from the drop in Amg Gwk's long position.| Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. Eshallgo Class A | Coca Cola vs. Amtech Systems | Coca Cola vs. Gold Fields Ltd |
| Amg Gwk vs. T Rowe Price | Amg Gwk vs. Amg Gwk Small | Amg Gwk vs. Aberdeen Emerging Markts | Amg Gwk vs. Invesco Disciplined Equity |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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