Correlation Between Coca Cola and FEDEX
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By analyzing existing cross correlation between The Coca Cola and FEDEX P 44, you can compare the effects of market volatilities on Coca Cola and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and FEDEX.
Diversification Opportunities for Coca Cola and FEDEX
Poor diversification
The 3 months correlation between Coca and FEDEX is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and FEDEX P 44 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 44 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 44 has no effect on the direction of Coca Cola i.e., Coca Cola and FEDEX go up and down completely randomly.
Pair Corralation between Coca Cola and FEDEX
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the FEDEX. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 7.51 times less risky than FEDEX. The stock trades about -0.09 of its potential returns per unit of risk. The FEDEX P 44 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,284 in FEDEX P 44 on August 30, 2024 and sell it today you would lose (53.00) from holding FEDEX P 44 or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. FEDEX P 44
Performance |
| Timeline |
| Coca Cola |
| FEDEX P 44 |
Coca Cola and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and FEDEX
The main advantage of trading using opposite Coca Cola and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX'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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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