Correlation Between Coca Cola and ETF Series
Can any of the company-specific risk be diversified away by investing in both Coca Cola and ETF Series 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 ETF Series 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 ETF Series Solutions, you can compare the effects of market volatilities on Coca Cola and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and ETF Series.
Diversification Opportunities for Coca Cola and ETF Series
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coca and ETF is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Coca Cola i.e., Coca Cola and ETF Series go up and down completely randomly.
Pair Corralation between Coca Cola and ETF Series
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 2.27 times more return on investment than ETF Series. However, Coca Cola is 2.27 times more volatile than ETF Series Solutions. It trades about 0.29 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.09 per unit of risk. If you would invest 6,271 in The Coca Cola on November 18, 2024 and sell it today you would earn a total of 616.00 from holding The Coca Cola or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. ETF Series Solutions
Performance |
| Timeline |
| Coca Cola |
| ETF Series Solutions |
Coca Cola and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and ETF Series
The main advantage of trading using opposite Coca Cola and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.| Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Coca Cola European Partners | Coca Cola vs. Vita Coco |
| ETF Series vs. FT Vest Equity | ETF Series vs. Northern Lights | ETF Series vs. Dimensional International High | ETF Series vs. First Trust Exchange Traded |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |