Correlation Between Coca Cola and SPDR DoubleLine
Can any of the company-specific risk be diversified away by investing in both Coca Cola and SPDR DoubleLine 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 SPDR DoubleLine 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 SPDR DoubleLine Total, you can compare the effects of market volatilities on Coca Cola and SPDR DoubleLine 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 SPDR DoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and SPDR DoubleLine.
Diversification Opportunities for Coca Cola and SPDR DoubleLine
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Coca and SPDR is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and SPDR DoubleLine Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR DoubleLine Total 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 SPDR DoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR DoubleLine Total has no effect on the direction of Coca Cola i.e., Coca Cola and SPDR DoubleLine go up and down completely randomly.
Pair Corralation between Coca Cola and SPDR DoubleLine
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the SPDR DoubleLine. In addition to that, Coca Cola is 4.76 times more volatile than SPDR DoubleLine Total. It trades about -0.1 of its total potential returns per unit of risk. SPDR DoubleLine Total is currently generating about 0.01 per unit of volatility. If you would invest 4,000 in SPDR DoubleLine Total on January 7, 2025 and sell it today you would earn a total of 1.00 from holding SPDR DoubleLine Total or generate 0.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. SPDR DoubleLine Total
Performance |
| Timeline |
| Coca Cola |
| SPDR DoubleLine Total |
Coca Cola and SPDR DoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and SPDR DoubleLine
The main advantage of trading using opposite Coca Cola and SPDR DoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, SPDR DoubleLine 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 SPDR DoubleLine will offset losses from the drop in SPDR DoubleLine's long position.| Coca Cola vs. Trustcash Holdings | Coca Cola vs. M Line Hldgs | Coca Cola vs. Aquagold International | Coca Cola vs. Morningstar Unconstrained Allocation |
| SPDR DoubleLine vs. PIMCO Active Bond | SPDR DoubleLine vs. SPDR Blackstone Senior | SPDR DoubleLine vs. SPDR Barclays Intermediate | SPDR DoubleLine vs. SPDR Bloomberg Investment |
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 Stocks Directory module to find actively traded stocks across global markets.
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