Correlation Between Coca Cola and RWLK Old
Can any of the company-specific risk be diversified away by investing in both Coca Cola and RWLK Old 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 RWLK Old 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 RWLK Old, you can compare the effects of market volatilities on Coca Cola and RWLK Old 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 RWLK Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and RWLK Old.
Diversification Opportunities for Coca Cola and RWLK Old
Pay attention - limited upside
The 3 months correlation between Coca and RWLK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and RWLK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RWLK Old 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 RWLK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RWLK Old has no effect on the direction of Coca Cola i.e., Coca Cola and RWLK Old go up and down completely randomly.
Pair Corralation between Coca Cola and RWLK Old
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.26 times more return on investment than RWLK Old. However, The Coca Cola is 3.88 times less risky than RWLK Old. It trades about 0.03 of its potential returns per unit of risk. RWLK Old is currently generating about -0.02 per unit of risk. If you would invest 5,660 in The Coca Cola on October 28, 2024 and sell it today you would earn a total of 532.00 from holding The Coca Cola or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 23.64% |
| Values | Daily Returns |
The Coca Cola vs. RWLK Old
Performance |
| Timeline |
| Coca Cola |
| RWLK Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coca Cola and RWLK Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and RWLK Old
The main advantage of trading using opposite Coca Cola and RWLK Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, RWLK Old 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 RWLK Old will offset losses from the drop in RWLK Old's long position.| Coca Cola vs. PepsiCo | Coca Cola vs. Vita Coco | Coca Cola vs. Aquagold International | Coca Cola vs. Thrivent High Yield |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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