Correlation Between Coca Cola and DIAGEO
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By analyzing existing cross correlation between The Coca Cola and DIAGEO CAPITAL PLC, you can compare the effects of market volatilities on Coca Cola and DIAGEO 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 DIAGEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and DIAGEO.
Diversification Opportunities for Coca Cola and DIAGEO
Poor diversification
The 3 months correlation between Coca and DIAGEO is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and DIAGEO CAPITAL PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIAGEO CAPITAL PLC 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 DIAGEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIAGEO CAPITAL PLC has no effect on the direction of Coca Cola i.e., Coca Cola and DIAGEO go up and down completely randomly.
Pair Corralation between Coca Cola and DIAGEO
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the DIAGEO. In addition to that, Coca Cola is 1.54 times more volatile than DIAGEO CAPITAL PLC. It trades about -0.29 of its total potential returns per unit of risk. DIAGEO CAPITAL PLC is currently generating about -0.22 per unit of volatility. If you would invest 8,576 in DIAGEO CAPITAL PLC on August 28, 2024 and sell it today you would lose (343.00) from holding DIAGEO CAPITAL PLC or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 78.57% |
| Values | Daily Returns |
The Coca Cola vs. DIAGEO CAPITAL PLC
Performance |
| Timeline |
| Coca Cola |
| DIAGEO CAPITAL PLC |
Coca Cola and DIAGEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and DIAGEO
The main advantage of trading using opposite Coca Cola and DIAGEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, DIAGEO 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 DIAGEO will offset losses from the drop in DIAGEO's long position.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
| DIAGEO vs. Broadstone Net Lease | DIAGEO vs. AerCap Holdings NV | DIAGEO vs. Zoom Video Communications | DIAGEO vs. China Aircraft Leasing |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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