Correlation Between Coca Cola and Hafnia
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Hafnia 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 Hafnia 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 Hafnia Limited, you can compare the effects of market volatilities on Coca Cola and Hafnia 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 Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Hafnia.
Diversification Opportunities for Coca Cola and Hafnia
Pay attention - limited upside
The 3 months correlation between Coca and Hafnia is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited 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 Hafnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hafnia Limited has no effect on the direction of Coca Cola i.e., Coca Cola and Hafnia go up and down completely randomly.
Pair Corralation between Coca Cola and Hafnia
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 1.4 times more return on investment than Hafnia. However, Coca Cola is 1.4 times more volatile than Hafnia Limited. It trades about 0.03 of its potential returns per unit of risk. Hafnia Limited is currently generating about -0.3 per unit of risk. If you would invest 6,254 in The Coca Cola on September 2, 2024 and sell it today you would earn a total of 154.00 from holding The Coca Cola or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
The Coca Cola vs. Hafnia Limited
Performance |
| Timeline |
| Coca Cola |
| Hafnia Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coca Cola and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Hafnia
The main advantage of trading using opposite Coca Cola and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Hafnia 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 Hafnia will offset losses from the drop in Hafnia'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 |
| Hafnia vs. Paltalk | Hafnia vs. Stepan Company | Hafnia vs. Harmony Gold Mining | Hafnia vs. Amkor Technology |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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