Correlation Between Coca Cola and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Credit Suisse 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 Credit Suisse 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 Credit Suisse X Links, you can compare the effects of market volatilities on Coca Cola and Credit Suisse 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 Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Credit Suisse.
Diversification Opportunities for Coca Cola and Credit Suisse
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca and Credit is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Credit Suisse X Links in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse X 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 Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse X has no effect on the direction of Coca Cola i.e., Coca Cola and Credit Suisse go up and down completely randomly.
Pair Corralation between Coca Cola and Credit Suisse
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 3.25 times less return on investment than Credit Suisse. But when comparing it to its historical volatility, The Coca Cola is 1.53 times less risky than Credit Suisse. It trades about 0.02 of its potential returns per unit of risk. Credit Suisse X Links is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,241 in Credit Suisse X Links on September 3, 2024 and sell it today you would earn a total of 1,524 from holding Credit Suisse X Links or generate 24.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Credit Suisse X Links
Performance |
| Timeline |
| Coca Cola |
| Credit Suisse X |
Coca Cola and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Credit Suisse
The main advantage of trading using opposite Coca Cola and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse'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 |
| Credit Suisse vs. Sprott Physical Silver | Credit Suisse vs. Blue Owl Capital | Credit Suisse vs. Ares Management LP | Credit Suisse vs. Sprott Inc |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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