Correlation Between Coca Cola and Exploits Discovery
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Exploits Discovery 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 Exploits Discovery 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 Exploits Discovery Corp, you can compare the effects of market volatilities on Coca Cola and Exploits Discovery 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 Exploits Discovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Exploits Discovery.
Diversification Opportunities for Coca Cola and Exploits Discovery
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coca and Exploits is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Exploits Discovery Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exploits Discovery Corp 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 Exploits Discovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exploits Discovery Corp has no effect on the direction of Coca Cola i.e., Coca Cola and Exploits Discovery go up and down completely randomly.
Pair Corralation between Coca Cola and Exploits Discovery
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.15 times more return on investment than Exploits Discovery. However, The Coca Cola is 6.85 times less risky than Exploits Discovery. It trades about -0.12 of its potential returns per unit of risk. Exploits Discovery Corp is currently generating about -0.21 per unit of risk. If you would invest 6,667 in The Coca Cola on August 29, 2024 and sell it today you would lose (176.00) from holding The Coca Cola or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Coca Cola vs. Exploits Discovery Corp
Performance |
| Timeline |
| Coca Cola |
| Exploits Discovery Corp |
Coca Cola and Exploits Discovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Exploits Discovery
The main advantage of trading using opposite Coca Cola and Exploits Discovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Exploits Discovery 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 Exploits Discovery will offset losses from the drop in Exploits Discovery's 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 |
| Exploits Discovery vs. Vertiv Holdings Co | Exploits Discovery vs. Nasdaq Inc | Exploits Discovery vs. McDonalds | Exploits Discovery vs. Walmart |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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