Correlation Between Coca Cola and IShares Cohen
Can any of the company-specific risk be diversified away by investing in both Coca Cola and IShares Cohen 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 IShares Cohen 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 iShares Cohen Steers, you can compare the effects of market volatilities on Coca Cola and IShares Cohen 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 IShares Cohen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and IShares Cohen.
Diversification Opportunities for Coca Cola and IShares Cohen
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coca and IShares is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and iShares Cohen Steers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Cohen Steers 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 IShares Cohen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Cohen Steers has no effect on the direction of Coca Cola i.e., Coca Cola and IShares Cohen go up and down completely randomly.
Pair Corralation between Coca Cola and IShares Cohen
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 1.49 times less return on investment than IShares Cohen. In addition to that, Coca Cola is 1.0 times more volatile than iShares Cohen Steers. It trades about 0.12 of its total potential returns per unit of risk. iShares Cohen Steers is currently generating about 0.17 per unit of volatility. If you would invest 5,937 in iShares Cohen Steers on November 9, 2024 and sell it today you would earn a total of 243.00 from holding iShares Cohen Steers or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. iShares Cohen Steers
Performance |
| Timeline |
| Coca Cola |
| iShares Cohen Steers |
Coca Cola and IShares Cohen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and IShares Cohen
The main advantage of trading using opposite Coca Cola and IShares Cohen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, IShares Cohen 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 IShares Cohen will offset losses from the drop in IShares Cohen's long position.| Coca Cola vs. Great Western Minerals | Coca Cola vs. Enterprise Bancorp | Coca Cola vs. T Rowe Price | Coca Cola vs. Aviat Networks |
| IShares Cohen vs. SPDR Dow Jones | IShares Cohen vs. iShares Real Estate | IShares Cohen vs. iShares North American | IShares Cohen vs. iShares Utilities ETF |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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