Correlation Between Coca Cola and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Timothy Plan 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 Timothy Plan 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 Timothy Plan Market, you can compare the effects of market volatilities on Coca Cola and Timothy Plan 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 Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Timothy Plan.
Diversification Opportunities for Coca Cola and Timothy Plan
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca and Timothy is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Timothy Plan Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Market 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 Timothy Plan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Plan Market has no effect on the direction of Coca Cola i.e., Coca Cola and Timothy Plan go up and down completely randomly.
Pair Corralation between Coca Cola and Timothy Plan
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 2.97 times more return on investment than Timothy Plan. However, Coca Cola is 2.97 times more volatile than Timothy Plan Market. It trades about 0.02 of its potential returns per unit of risk. Timothy Plan Market is currently generating about 0.05 per unit of risk. If you would invest 6,019 in The Coca Cola on September 3, 2024 and sell it today you would earn a total of 389.00 from holding The Coca Cola or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.34% |
| Values | Daily Returns |
The Coca Cola vs. Timothy Plan Market
Performance |
| Timeline |
| Coca Cola |
| Timothy Plan Market |
Coca Cola and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Timothy Plan
The main advantage of trading using opposite Coca Cola and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Timothy Plan 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 Timothy Plan will offset losses from the drop in Timothy Plan'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 |
| Timothy Plan vs. Timothy Plan Small | Timothy Plan vs. Timothy Plan LargeMid | Timothy Plan vs. Timothy Plan | Timothy Plan vs. Angel Oak Ultrashort |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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