Correlation Between Coca Cola and Jackpot Digital
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Jackpot Digital 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 Jackpot Digital 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 Jackpot Digital, you can compare the effects of market volatilities on Coca Cola and Jackpot Digital 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 Jackpot Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Jackpot Digital.
Diversification Opportunities for Coca Cola and Jackpot Digital
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coca and Jackpot is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Jackpot Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackpot Digital 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 Jackpot Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackpot Digital has no effect on the direction of Coca Cola i.e., Coca Cola and Jackpot Digital go up and down completely randomly.
Pair Corralation between Coca Cola and Jackpot Digital
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.24 times more return on investment than Jackpot Digital. However, The Coca Cola is 4.23 times less risky than Jackpot Digital. It trades about -0.17 of its potential returns per unit of risk. Jackpot Digital is currently generating about -0.04 per unit of risk. If you would invest 7,036 in The Coca Cola on August 25, 2024 and sell it today you would lose (644.00) from holding The Coca Cola or give up 9.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
The Coca Cola vs. Jackpot Digital
Performance |
| Timeline |
| Coca Cola |
| Jackpot Digital |
Coca Cola and Jackpot Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Jackpot Digital
The main advantage of trading using opposite Coca Cola and Jackpot Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Jackpot Digital 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 Jackpot Digital will offset losses from the drop in Jackpot Digital's long position.| Coca Cola vs. Vita Coco | Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. National Beverage Corp | Coca Cola vs. Celsius Holdings |
| Jackpot Digital vs. Intema Solutions | Jackpot Digital vs. 888 Holdings | Jackpot Digital vs. Royal Wins | Jackpot Digital vs. Churchill Downs Incorporated |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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