Correlation Between Coca Cola and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Neuberger Berman 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 Neuberger Berman 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 Neuberger Berman Long, you can compare the effects of market volatilities on Coca Cola and Neuberger Berman 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 Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Neuberger Berman.
Diversification Opportunities for Coca Cola and Neuberger Berman
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and Neuberger is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Neuberger Berman Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Long 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 Neuberger Berman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuberger Berman Long has no effect on the direction of Coca Cola i.e., Coca Cola and Neuberger Berman go up and down completely randomly.
Pair Corralation between Coca Cola and Neuberger Berman
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Neuberger Berman. In addition to that, Coca Cola is 3.18 times more volatile than Neuberger Berman Long. It trades about -0.17 of its total potential returns per unit of risk. Neuberger Berman Long is currently generating about 0.22 per unit of volatility. If you would invest 1,744 in Neuberger Berman Long on August 28, 2024 and sell it today you would earn a total of 24.00 from holding Neuberger Berman Long or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Neuberger Berman Long
Performance |
| Timeline |
| Coca Cola |
| Neuberger Berman Long |
Coca Cola and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Neuberger Berman
The main advantage of trading using opposite Coca Cola and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Neuberger Berman 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 Neuberger Berman will offset losses from the drop in Neuberger Berman'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 |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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