Correlation Between Coca Cola and Société Générale
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Société Générale 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 Société Générale 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 Socit Gnrale Socit, you can compare the effects of market volatilities on Coca Cola and Société Générale 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 Société Générale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Société Générale.
Diversification Opportunities for Coca Cola and Société Générale
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coca and Société is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit 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 Société Générale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of Coca Cola i.e., Coca Cola and Société Générale go up and down completely randomly.
Pair Corralation between Coca Cola and Société Générale
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 2.31 times less return on investment than Société Générale. But when comparing it to its historical volatility, The Coca Cola is 3.45 times less risky than Société Générale. It trades about 0.37 of its potential returns per unit of risk. Socit Gnrale Socit is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,996 in Socit Gnrale Socit on November 28, 2024 and sell it today you would earn a total of 860.00 from holding Socit Gnrale Socit or generate 28.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Coca Cola vs. Socit Gnrale Socit
Performance |
| Timeline |
| Coca Cola |
| Socit Gnrale Socit |
Coca Cola and Société Générale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Société Générale
The main advantage of trading using opposite Coca Cola and Société Générale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Société Générale 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 Société Générale will offset losses from the drop in Société Générale's long position.| Coca Cola vs. Vita Coco | Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. PepsiCo | Coca Cola vs. Coca Cola Femsa SAB |
| Société Générale vs. Banco Bradesco SA | Société Générale vs. Itau Unibanco Banco | Société Générale vs. Lloyds Banking Group | Société Générale vs. Deutsche Bank AG |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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