Correlation Between Coca Cola and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Angel Oak 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 Angel Oak 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 Angel Oak Funds, you can compare the effects of market volatilities on Coca Cola and Angel Oak 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 Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Angel Oak.
Diversification Opportunities for Coca Cola and Angel Oak
Almost no diversification
The 3 months correlation between Coca and Angel is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Angel Oak Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Funds 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 Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Funds has no effect on the direction of Coca Cola i.e., Coca Cola and Angel Oak go up and down completely randomly.
Pair Corralation between Coca Cola and Angel Oak
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 1.23 times less return on investment than Angel Oak. In addition to that, Coca Cola is 2.7 times more volatile than Angel Oak Funds. It trades about 0.03 of its total potential returns per unit of risk. Angel Oak Funds is currently generating about 0.11 per unit of volatility. If you would invest 810.00 in Angel Oak Funds on September 3, 2024 and sell it today you would earn a total of 52.00 from holding Angel Oak Funds or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 41.89% |
| Values | Daily Returns |
The Coca Cola vs. Angel Oak Funds
Performance |
| Timeline |
| Coca Cola |
| Angel Oak Funds |
Coca Cola and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Angel Oak
The main advantage of trading using opposite Coca Cola and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak'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 |
| Angel Oak vs. Valued Advisers Trust | Angel Oak vs. Columbia Diversified Fixed | Angel Oak vs. Principal Exchange Traded Funds | Angel Oak vs. Doubleline Etf Trust |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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