Correlation Between Coca Cola and MBT Bancshares
Can any of the company-specific risk be diversified away by investing in both Coca Cola and MBT Bancshares 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 MBT Bancshares 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 MBT Bancshares, you can compare the effects of market volatilities on Coca Cola and MBT Bancshares 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 MBT Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and MBT Bancshares.
Diversification Opportunities for Coca Cola and MBT Bancshares
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and MBT is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and MBT Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBT Bancshares 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 MBT Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBT Bancshares has no effect on the direction of Coca Cola i.e., Coca Cola and MBT Bancshares go up and down completely randomly.
Pair Corralation between Coca Cola and MBT Bancshares
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 1.14 times less return on investment than MBT Bancshares. But when comparing it to its historical volatility, The Coca Cola is 4.31 times less risky than MBT Bancshares. It trades about 0.02 of its potential returns per unit of risk. MBT Bancshares is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,250 in MBT Bancshares on August 29, 2024 and sell it today you would lose (295.00) from holding MBT Bancshares or give up 13.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 64.52% |
| Values | Daily Returns |
The Coca Cola vs. MBT Bancshares
Performance |
| Timeline |
| Coca Cola |
| MBT Bancshares |
Coca Cola and MBT Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and MBT Bancshares
The main advantage of trading using opposite Coca Cola and MBT Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, MBT Bancshares 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 MBT Bancshares will offset losses from the drop in MBT Bancshares' long position.| Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola European Partners | Coca Cola vs. Capital Income Builder | Coca Cola vs. Direxion Daily FTSE |
| MBT Bancshares vs. Invesco High Income | MBT Bancshares vs. Blackrock Muniholdings Ny | MBT Bancshares vs. Nuveen California Select | MBT Bancshares vs. MFS Investment Grade |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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