Correlation Between Coca Cola and ProShares Nasdaq
Can any of the company-specific risk be diversified away by investing in both Coca Cola and ProShares Nasdaq 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 ProShares Nasdaq 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 ProShares Nasdaq 100 High, you can compare the effects of market volatilities on Coca Cola and ProShares Nasdaq 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 ProShares Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and ProShares Nasdaq.
Diversification Opportunities for Coca Cola and ProShares Nasdaq
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and ProShares is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and ProShares Nasdaq 100 High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Nasdaq 100 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 ProShares Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Nasdaq 100 has no effect on the direction of Coca Cola i.e., Coca Cola and ProShares Nasdaq go up and down completely randomly.
Pair Corralation between Coca Cola and ProShares Nasdaq
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the ProShares Nasdaq. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 1.08 times less risky than ProShares Nasdaq. The stock trades about -0.08 of its potential returns per unit of risk. The ProShares Nasdaq 100 High is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,135 in ProShares Nasdaq 100 High on September 4, 2024 and sell it today you would earn a total of 205.00 from holding ProShares Nasdaq 100 High or generate 4.96% 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. ProShares Nasdaq 100 High
Performance |
| Timeline |
| Coca Cola |
| ProShares Nasdaq 100 |
Coca Cola and ProShares Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and ProShares Nasdaq
The main advantage of trading using opposite Coca Cola and ProShares Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, ProShares Nasdaq 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 ProShares Nasdaq will offset losses from the drop in ProShares Nasdaq'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 |
| ProShares Nasdaq vs. Global X SP | ProShares Nasdaq vs. Global X NASDAQ | ProShares Nasdaq vs. NEOS ETF Trust | ProShares Nasdaq vs. JPMorgan Equity Premium |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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