Correlation Between Coca Cola and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Tactical, you can compare the effects of market volatilities on Coca Cola and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Goldman Sachs.
Diversification Opportunities for Coca Cola and Goldman Sachs
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coca and Goldman is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Goldman Sachs Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Tactical 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Tactical has no effect on the direction of Coca Cola i.e., Coca Cola and Goldman Sachs go up and down completely randomly.
Pair Corralation between Coca Cola and Goldman Sachs
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Goldman Sachs. In addition to that, Coca Cola is 7.44 times more volatile than Goldman Sachs Tactical. It trades about -0.12 of its total potential returns per unit of risk. Goldman Sachs Tactical is currently generating about -0.03 per unit of volatility. If you would invest 1,094 in Goldman Sachs Tactical on August 29, 2024 and sell it today you would lose (1.00) from holding Goldman Sachs Tactical or give up 0.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Goldman Sachs Tactical
Performance |
| Timeline |
| Coca Cola |
| Goldman Sachs Tactical |
Coca Cola and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Goldman Sachs
The main advantage of trading using opposite Coca Cola and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola European Partners | Coca Cola vs. Capital Income Builder | Coca Cola vs. Direxion Daily FTSE |
| Goldman Sachs vs. Icon Bond Fund | Goldman Sachs vs. Touchstone Premium Yield | Goldman Sachs vs. Vanguard High Yield Tax Exempt | Goldman Sachs vs. Ab Global Bond |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |