Correlation Between Coca Cola and Innovator Hedged
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Innovator Hedged 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 Innovator Hedged 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 Innovator Hedged Nasdaq 100, you can compare the effects of market volatilities on Coca Cola and Innovator Hedged 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 Innovator Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Innovator Hedged.
Diversification Opportunities for Coca Cola and Innovator Hedged
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Innovator is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Innovator Hedged Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Hedged Nasdaq 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 Innovator Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Hedged Nasdaq has no effect on the direction of Coca Cola i.e., Coca Cola and Innovator Hedged go up and down completely randomly.
Pair Corralation between Coca Cola and Innovator Hedged
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Innovator Hedged. In addition to that, Coca Cola is 1.29 times more volatile than Innovator Hedged Nasdaq 100. It trades about -0.08 of its total potential returns per unit of risk. Innovator Hedged Nasdaq 100 is currently generating about 0.28 per unit of volatility. If you would invest 2,546 in Innovator Hedged Nasdaq 100 on September 3, 2024 and sell it today you would earn a total of 95.00 from holding Innovator Hedged Nasdaq 100 or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Innovator Hedged Nasdaq 100
Performance |
| Timeline |
| Coca Cola |
| Innovator Hedged Nasdaq |
Coca Cola and Innovator Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Innovator Hedged
The main advantage of trading using opposite Coca Cola and Innovator Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Innovator Hedged 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 Innovator Hedged will offset losses from the drop in Innovator Hedged'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 |
| Innovator Hedged vs. Core Alternative ETF | Innovator Hedged vs. Aptus Drawdown Managed | Innovator Hedged vs. Amplify BlackSwan Growth | Innovator Hedged vs. Invesco SP 500 |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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