Correlation Between Coca Cola and BAIDU
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By analyzing existing cross correlation between The Coca Cola and BAIDU INC 3625, 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 -0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and BAIDU INC 3625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAIDU INC 3625 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 3625 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 The Coca Cola is expected to under-perform the BAIDU. In addition to that, Coca Cola is 3.16 times more volatile than BAIDU INC 3625. It trades about -0.38 of its total potential returns per unit of risk. BAIDU INC 3625 is currently generating about -0.36 per unit of volatility. If you would invest 9,799 in BAIDU INC 3625 on August 23, 2024 and sell it today you would lose (53.00) from holding BAIDU INC 3625 or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 21.74% |
| Values | Daily Returns |
The Coca Cola vs. BAIDU INC 3625
Performance |
| Timeline |
| Coca Cola |
| BAIDU INC 3625 |
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. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Vita Coco |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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