Correlation Between Coca Cola and NSTAR Electric
Can any of the company-specific risk be diversified away by investing in both Coca Cola and NSTAR Electric 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 NSTAR Electric 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 NSTAR Electric, you can compare the effects of market volatilities on Coca Cola and NSTAR Electric 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 NSTAR Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and NSTAR Electric.
Diversification Opportunities for Coca Cola and NSTAR Electric
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and NSTAR is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and NSTAR Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR Electric 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 NSTAR Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR Electric has no effect on the direction of Coca Cola i.e., Coca Cola and NSTAR Electric go up and down completely randomly.
Pair Corralation between Coca Cola and NSTAR Electric
If you would invest 8,350 in NSTAR Electric on September 2, 2024 and sell it today you would earn a total of 0.00 from holding NSTAR Electric or generate 0.0% 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. NSTAR Electric
Performance |
| Timeline |
| Coca Cola |
| NSTAR Electric |
Coca Cola and NSTAR Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and NSTAR Electric
The main advantage of trading using opposite Coca Cola and NSTAR Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, NSTAR Electric 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 NSTAR Electric will offset losses from the drop in NSTAR Electric'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 |
| NSTAR Electric vs. Southern Company | NSTAR Electric vs. Duke Energy | NSTAR Electric vs. Duke Energy | NSTAR Electric vs. National Grid PLC |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |