Correlation Between Coca Cola and GROUP
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By analyzing existing cross correlation between The Coca Cola and GROUP 1 AUTOMOTIVE, you can compare the effects of market volatilities on Coca Cola and GROUP 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 GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and GROUP.
Diversification Opportunities for Coca Cola and GROUP
Poor diversification
The 3 months correlation between Coca and GROUP is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and GROUP 1 AUTOMOTIVE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GROUP 1 AUTOMOTIVE 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 GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GROUP 1 AUTOMOTIVE has no effect on the direction of Coca Cola i.e., Coca Cola and GROUP go up and down completely randomly.
Pair Corralation between Coca Cola and GROUP
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.73 times more return on investment than GROUP. However, The Coca Cola is 1.36 times less risky than GROUP. It trades about -0.26 of its potential returns per unit of risk. GROUP 1 AUTOMOTIVE is currently generating about -0.29 per unit of risk. If you would invest 6,730 in The Coca Cola on August 25, 2024 and sell it today you would lose (338.00) from holding The Coca Cola or give up 5.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Coca Cola vs. GROUP 1 AUTOMOTIVE
Performance |
| Timeline |
| Coca Cola |
| GROUP 1 AUTOMOTIVE |
Coca Cola and GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and GROUP
The main advantage of trading using opposite Coca Cola and GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, GROUP 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 GROUP will offset losses from the drop in GROUP's long position.| Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. Eshallgo Class A | Coca Cola vs. Amtech Systems | Coca Cola vs. Gold Fields Ltd |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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