Correlation Between Coca Cola and USCF ETF
Can any of the company-specific risk be diversified away by investing in both Coca Cola and USCF ETF 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 USCF ETF 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 USCF ETF Trust, you can compare the effects of market volatilities on Coca Cola and USCF ETF 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 USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and USCF ETF.
Diversification Opportunities for Coca Cola and USCF ETF
Pay attention - limited upside
The 3 months correlation between Coca and USCF is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and USCF ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF ETF Trust 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 USCF ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF ETF Trust has no effect on the direction of Coca Cola i.e., Coca Cola and USCF ETF go up and down completely randomly.
Pair Corralation between Coca Cola and USCF ETF
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the USCF ETF. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 1.21 times less risky than USCF ETF. The stock trades about -0.06 of its potential returns per unit of risk. The USCF ETF Trust is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,992 in USCF ETF Trust on September 1, 2024 and sell it today you would earn a total of 146.00 from holding USCF ETF Trust or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Coca Cola vs. USCF ETF Trust
Performance |
| Timeline |
| Coca Cola |
| USCF ETF Trust |
Coca Cola and USCF ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and USCF ETF
The main advantage of trading using opposite Coca Cola and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, USCF ETF 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 USCF ETF will offset losses from the drop in USCF ETF's long position.| Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. National Beverage Corp | Coca Cola vs. Embotelladora Andina SA |
| USCF ETF vs. Franklin Templeton ETF | USCF ETF vs. Altrius Global Dividend | USCF ETF vs. Invesco Exchange Traded | USCF ETF vs. Franklin International Core |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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