Correlation Between Coca Cola and APPLE
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By analyzing existing cross correlation between The Coca Cola and APPLE INC, you can compare the effects of market volatilities on Coca Cola and APPLE 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 APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and APPLE.
Diversification Opportunities for Coca Cola and APPLE
Modest diversification
The 3 months correlation between Coca and APPLE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and APPLE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE 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 APPLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLE INC has no effect on the direction of Coca Cola i.e., Coca Cola and APPLE go up and down completely randomly.
Pair Corralation between Coca Cola and APPLE
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the APPLE. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 3.03 times less risky than APPLE. The stock trades about -0.12 of its potential returns per unit of risk. The APPLE INC is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 6,225 in APPLE INC on August 31, 2024 and sell it today you would earn a total of 794.00 from holding APPLE INC or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Coca Cola vs. APPLE INC
Performance |
| Timeline |
| Coca Cola |
| APPLE INC |
Coca Cola and APPLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and APPLE
The main advantage of trading using opposite Coca Cola and APPLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, APPLE 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 APPLE will offset losses from the drop in APPLE'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 |
| APPLE vs. Hurco Companies | APPLE vs. Aldel Financial II | APPLE vs. Chester Mining | APPLE vs. Eldorado Gold Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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