Correlation Between Coca Cola and SCOR PK
Can any of the company-specific risk be diversified away by investing in both Coca Cola and SCOR PK 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 SCOR PK 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 SCOR PK, you can compare the effects of market volatilities on Coca Cola and SCOR PK 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 SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and SCOR PK.
Diversification Opportunities for Coca Cola and SCOR PK
Weak diversification
The 3 months correlation between Coca and SCOR is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK 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 SCOR PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR PK has no effect on the direction of Coca Cola i.e., Coca Cola and SCOR PK go up and down completely randomly.
Pair Corralation between Coca Cola and SCOR PK
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.72 times more return on investment than SCOR PK. However, The Coca Cola is 1.4 times less risky than SCOR PK. It trades about 0.29 of its potential returns per unit of risk. SCOR PK is currently generating about 0.1 per unit of risk. If you would invest 6,271 in The Coca Cola on November 18, 2024 and sell it today you would earn a total of 616.00 from holding The Coca Cola or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. SCOR PK
Performance |
| Timeline |
| Coca Cola |
| SCOR PK |
Coca Cola and SCOR PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and SCOR PK
The main advantage of trading using opposite Coca Cola and SCOR PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, SCOR PK 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 SCOR PK will offset losses from the drop in SCOR PK's long position.| Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Coca Cola European Partners | Coca Cola vs. Vita Coco |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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