Correlation Between Coca Cola and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Massmutual Select 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 Massmutual Select 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 Massmutual Select T, you can compare the effects of market volatilities on Coca Cola and Massmutual Select 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 Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Massmutual Select.
Diversification Opportunities for Coca Cola and Massmutual Select
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and Massmutual is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select 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 Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select has no effect on the direction of Coca Cola i.e., Coca Cola and Massmutual Select go up and down completely randomly.
Pair Corralation between Coca Cola and Massmutual Select
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 1.66 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, The Coca Cola is 1.25 times less risky than Massmutual Select. It trades about 0.08 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,461 in Massmutual Select T on September 1, 2024 and sell it today you would earn a total of 432.00 from holding Massmutual Select T or generate 29.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Massmutual Select T
Performance |
| Timeline |
| Coca Cola |
| Massmutual Select |
Coca Cola and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Massmutual Select
The main advantage of trading using opposite Coca Cola and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select's long position.| Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Embotelladora Andina SA | Coca Cola vs. National Beverage Corp | Coca Cola vs. Embotelladora Andina SA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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