Correlation Between Coca Cola and Greene Concepts
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Greene Concepts 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 Greene Concepts 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 Greene Concepts, you can compare the effects of market volatilities on Coca Cola and Greene Concepts 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 Greene Concepts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Greene Concepts.
Diversification Opportunities for Coca Cola and Greene Concepts
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coca and Greene is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Greene Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greene Concepts 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 Greene Concepts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greene Concepts has no effect on the direction of Coca Cola i.e., Coca Cola and Greene Concepts go up and down completely randomly.
Pair Corralation between Coca Cola and Greene Concepts
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.09 times more return on investment than Greene Concepts. However, The Coca Cola is 10.97 times less risky than Greene Concepts. It trades about 0.04 of its potential returns per unit of risk. Greene Concepts is currently generating about -0.01 per unit of risk. If you would invest 5,722 in The Coca Cola on August 31, 2024 and sell it today you would earn a total of 686.00 from holding The Coca Cola or generate 11.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
The Coca Cola vs. Greene Concepts
Performance |
| Timeline |
| Coca Cola |
| Greene Concepts |
Coca Cola and Greene Concepts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Greene Concepts
The main advantage of trading using opposite Coca Cola and Greene Concepts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Greene Concepts 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 Greene Concepts will offset losses from the drop in Greene Concepts' long position.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. RLJ Lodging Trust | Coca Cola vs. Aquagold International | Coca Cola vs. Stepstone Group |
| Greene Concepts vs. High Performance Beverages | Greene Concepts vs. V Group | Greene Concepts vs. Fbec Worldwide | Greene Concepts vs. Hiru Corporation |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |