Correlation Between Coca Cola and Posera
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Posera 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 Posera 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 Posera, you can compare the effects of market volatilities on Coca Cola and Posera 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 Posera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Posera.
Diversification Opportunities for Coca Cola and Posera
Very poor diversification
The 3 months correlation between Coca and Posera is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Posera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posera 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 Posera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posera has no effect on the direction of Coca Cola i.e., Coca Cola and Posera go up and down completely randomly.
Pair Corralation between Coca Cola and Posera
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.09 times more return on investment than Posera. However, The Coca Cola is 10.77 times less risky than Posera. It trades about 0.07 of its potential returns per unit of risk. Posera is currently generating about 0.0 per unit of risk. If you would invest 5,382 in The Coca Cola on August 25, 2024 and sell it today you would earn a total of 1,010 from holding The Coca Cola or generate 18.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Posera
Performance |
| Timeline |
| Coca Cola |
| Posera |
Coca Cola and Posera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Posera
The main advantage of trading using opposite Coca Cola and Posera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Posera 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 Posera will offset losses from the drop in Posera's long position.| Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. Eshallgo Class A | Coca Cola vs. Amtech Systems | Coca Cola vs. Gold Fields Ltd |
| Posera vs. Pampa Metals | Posera vs. Progressive Planet Solutions | Posera vs. Searchlight Resources | Posera vs. Durango 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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