Correlation Between Coca Cola and SEI Exchange
Can any of the company-specific risk be diversified away by investing in both Coca Cola and SEI Exchange 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 SEI Exchange 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 SEI Exchange Traded, you can compare the effects of market volatilities on Coca Cola and SEI Exchange 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 SEI Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and SEI Exchange.
Diversification Opportunities for Coca Cola and SEI Exchange
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and SEI is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and SEI Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Exchange Traded 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 SEI Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Exchange Traded has no effect on the direction of Coca Cola i.e., Coca Cola and SEI Exchange go up and down completely randomly.
Pair Corralation between Coca Cola and SEI Exchange
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 3.1 times less return on investment than SEI Exchange. In addition to that, Coca Cola is 1.02 times more volatile than SEI Exchange Traded. It trades about 0.04 of its total potential returns per unit of risk. SEI Exchange Traded is currently generating about 0.13 per unit of volatility. If you would invest 3,047 in SEI Exchange Traded on September 1, 2024 and sell it today you would earn a total of 442.00 from holding SEI Exchange Traded or generate 14.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
The Coca Cola vs. SEI Exchange Traded
Performance |
| Timeline |
| Coca Cola |
| SEI Exchange Traded |
Coca Cola and SEI Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and SEI Exchange
The main advantage of trading using opposite Coca Cola and SEI Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, SEI Exchange 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 SEI Exchange will offset losses from the drop in SEI Exchange's long position.| Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. National Beverage Corp | Coca Cola vs. Embotelladora Andina SA |
| SEI Exchange vs. iShares Core SP | SEI Exchange vs. iShares Core MSCI | SEI Exchange vs. iShares Broad USD | SEI Exchange vs. iShares Core SP |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |