Correlation Between Coca Cola and Sentinel Mon
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Sentinel Mon 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 Sentinel Mon 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 Sentinel Mon Stock, you can compare the effects of market volatilities on Coca Cola and Sentinel Mon 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 Sentinel Mon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Sentinel Mon.
Diversification Opportunities for Coca Cola and Sentinel Mon
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Sentinel is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Sentinel Mon Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Mon Stock 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 Sentinel Mon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Mon Stock has no effect on the direction of Coca Cola i.e., Coca Cola and Sentinel Mon go up and down completely randomly.
Pair Corralation between Coca Cola and Sentinel Mon
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 1.83 times less return on investment than Sentinel Mon. In addition to that, Coca Cola is 1.11 times more volatile than Sentinel Mon Stock. It trades about 0.06 of its total potential returns per unit of risk. Sentinel Mon Stock is currently generating about 0.13 per unit of volatility. If you would invest 5,135 in Sentinel Mon Stock on August 24, 2024 and sell it today you would earn a total of 1,259 from holding Sentinel Mon Stock or generate 24.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Sentinel Mon Stock
Performance |
| Timeline |
| Coca Cola |
| Sentinel Mon Stock |
Coca Cola and Sentinel Mon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Sentinel Mon
The main advantage of trading using opposite Coca Cola and Sentinel Mon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Sentinel Mon 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 Sentinel Mon will offset losses from the drop in Sentinel Mon'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 |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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