Correlation Between Coca Cola and Sientra
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Sientra 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 Sientra 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 Sientra, you can compare the effects of market volatilities on Coca Cola and Sientra 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 Sientra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Sientra.
Diversification Opportunities for Coca Cola and Sientra
Pay attention - limited upside
The 3 months correlation between Coca and Sientra is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Sientra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sientra 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 Sientra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sientra has no effect on the direction of Coca Cola i.e., Coca Cola and Sientra go up and down completely randomly.
Pair Corralation between Coca Cola and Sientra
If you would invest 5,700 in The Coca Cola on September 2, 2024 and sell it today you would earn a total of 708.00 from holding The Coca Cola or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
The Coca Cola vs. Sientra
Performance |
| Timeline |
| Coca Cola |
| Sientra |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coca Cola and Sientra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Sientra
The main advantage of trading using opposite Coca Cola and Sientra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Sientra 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 Sientra will offset losses from the drop in Sientra's long position.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |