Correlation Between Coca Cola and ALTRIA
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By analyzing existing cross correlation between The Coca Cola and ALTRIA GROUP INC, you can compare the effects of market volatilities on Coca Cola and ALTRIA 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 ALTRIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and ALTRIA.
Diversification Opportunities for Coca Cola and ALTRIA
Poor diversification
The 3 months correlation between Coca and ALTRIA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and ALTRIA GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTRIA GROUP INC 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 ALTRIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALTRIA GROUP INC has no effect on the direction of Coca Cola i.e., Coca Cola and ALTRIA go up and down completely randomly.
Pair Corralation between Coca Cola and ALTRIA
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.56 times more return on investment than ALTRIA. However, The Coca Cola is 1.79 times less risky than ALTRIA. It trades about 0.03 of its potential returns per unit of risk. ALTRIA GROUP INC is currently generating about 0.0 per unit of risk. If you would invest 5,890 in The Coca Cola on August 31, 2024 and sell it today you would earn a total of 518.00 from holding The Coca Cola or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
The Coca Cola vs. ALTRIA GROUP INC
Performance |
| Timeline |
| Coca Cola |
| ALTRIA GROUP INC |
Coca Cola and ALTRIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and ALTRIA
The main advantage of trading using opposite Coca Cola and ALTRIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, ALTRIA 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 ALTRIA will offset losses from the drop in ALTRIA's long position.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. RLJ Lodging Trust | Coca Cola vs. Aquagold International | Coca Cola vs. Stepstone Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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