Correlation Between Coca Cola and BAIDU
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By analyzing existing cross correlation between The Coca Cola and BAIDU INC 4125, you can compare the effects of market volatilities on Coca Cola and BAIDU 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 BAIDU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and BAIDU.
Diversification Opportunities for Coca Cola and BAIDU
Pay attention - limited upside
The 3 months correlation between Coca and BAIDU is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and BAIDU INC 4125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAIDU INC 4125 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 BAIDU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAIDU INC 4125 has no effect on the direction of Coca Cola i.e., Coca Cola and BAIDU go up and down completely randomly.
Pair Corralation between Coca Cola and BAIDU
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 478.83 times less return on investment than BAIDU. But when comparing it to its historical volatility, The Coca Cola is 120.38 times less risky than BAIDU. It trades about 0.02 of its potential returns per unit of risk. BAIDU INC 4125 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,711 in BAIDU INC 4125 on August 30, 2024 and sell it today you would earn a total of 228.00 from holding BAIDU INC 4125 or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 20.81% |
| Values | Daily Returns |
The Coca Cola vs. BAIDU INC 4125
Performance |
| Timeline |
| Coca Cola |
| BAIDU INC 4125 |
Coca Cola and BAIDU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and BAIDU
The main advantage of trading using opposite Coca Cola and BAIDU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, BAIDU 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 BAIDU will offset losses from the drop in BAIDU's 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 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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