Correlation Between Coca Cola and GENERAL
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By analyzing existing cross correlation between The Coca Cola and GENERAL ELEC CAP, you can compare the effects of market volatilities on Coca Cola and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and GENERAL.
Diversification Opportunities for Coca Cola and GENERAL
Very good diversification
The 3 months correlation between Coca and GENERAL is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC CAP 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of Coca Cola i.e., Coca Cola and GENERAL go up and down completely randomly.
Pair Corralation between Coca Cola and GENERAL
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 2.01 times less return on investment than GENERAL. But when comparing it to its historical volatility, The Coca Cola is 1.86 times less risky than GENERAL. It trades about 0.02 of its potential returns per unit of risk. GENERAL ELEC CAP is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9,838 in GENERAL ELEC CAP on September 2, 2024 and sell it today you would earn a total of 415.00 from holding GENERAL ELEC CAP or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 40.73% |
| Values | Daily Returns |
The Coca Cola vs. GENERAL ELEC CAP
Performance |
| Timeline |
| Coca Cola |
| GENERAL ELEC CAP |
Coca Cola and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and GENERAL
The main advantage of trading using opposite Coca Cola and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL'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 |
| GENERAL vs. Sabre Corpo | GENERAL vs. Papaya Growth Opportunity | GENERAL vs. Balchem | GENERAL vs. Axalta Coating Systems |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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