Correlation Between Coca Cola and Osaka Steel
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Osaka Steel 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 Osaka Steel 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 Osaka Steel Co,, you can compare the effects of market volatilities on Coca Cola and Osaka Steel 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 Osaka Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Osaka Steel.
Diversification Opportunities for Coca Cola and Osaka Steel
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and Osaka is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Osaka Steel Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osaka Steel Co, 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 Osaka Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osaka Steel Co, has no effect on the direction of Coca Cola i.e., Coca Cola and Osaka Steel go up and down completely randomly.
Pair Corralation between Coca Cola and Osaka Steel
If you would invest 6,272 in The Coca Cola on September 13, 2024 and sell it today you would earn a total of 101.50 from holding The Coca Cola or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Coca Cola vs. Osaka Steel Co,
Performance |
| Timeline |
| Coca Cola |
| Osaka Steel Co, |
Coca Cola and Osaka Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Osaka Steel
The main advantage of trading using opposite Coca Cola and Osaka Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Osaka Steel 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 Osaka Steel will offset losses from the drop in Osaka Steel'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 |
| Osaka Steel vs. Copa Holdings SA | Osaka Steel vs. United Airlines Holdings | Osaka Steel vs. Delta Air Lines | Osaka Steel vs. SkyWest |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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