Correlation Between Coca Cola and Nascent Wine
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Nascent Wine 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 Nascent Wine 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 Nascent Wine, you can compare the effects of market volatilities on Coca Cola and Nascent Wine 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 Nascent Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Nascent Wine.
Diversification Opportunities for Coca Cola and Nascent Wine
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Nascent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Nascent Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nascent Wine 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 Nascent Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nascent Wine has no effect on the direction of Coca Cola i.e., Coca Cola and Nascent Wine go up and down completely randomly.
Pair Corralation between Coca Cola and Nascent Wine
If you would invest 6,387 in The Coca Cola on November 27, 2024 and sell it today you would earn a total of 672.00 from holding The Coca Cola or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Nascent Wine
Performance |
| Timeline |
| Coca Cola |
| Nascent Wine |
Coca Cola and Nascent Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Nascent Wine
The main advantage of trading using opposite Coca Cola and Nascent Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Nascent Wine 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 Nascent Wine will offset losses from the drop in Nascent Wine's long position.| Coca Cola vs. Vita Coco | Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. PepsiCo | Coca Cola vs. Coca Cola Femsa SAB |
| Nascent Wine vs. Scholastic | Nascent Wine vs. Kaiser Aluminum | Nascent Wine vs. Afya | Nascent Wine vs. Idaho Strategic Resources |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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