Correlation Between Coca Cola and 437076BY7

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Coca Cola and 437076BY7 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Coca Cola and 437076BY7 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and HOME DEPOT INC, you can compare the effects of market volatilities on Coca Cola and 437076BY7 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 437076BY7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and 437076BY7.

Diversification Opportunities for Coca Cola and 437076BY7

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Coca and 437076BY7 is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and HOME DEPOT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOME DEPOT INC 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 437076BY7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOME DEPOT INC has no effect on the direction of Coca Cola i.e., Coca Cola and 437076BY7 go up and down completely randomly.

Pair Corralation between Coca Cola and 437076BY7

If you would invest  6,013  in The Coca Cola on August 27, 2024 and sell it today you would earn a total of  379.00  from holding The Coca Cola or generate 6.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy0.2%
ValuesDaily Returns

The Coca Cola  vs.  HOME DEPOT INC

 Performance 
       Timeline  
Coca Cola 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days The Coca Cola has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
HOME DEPOT INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HOME DEPOT INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 437076BY7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Coca Cola and 437076BY7 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coca Cola and 437076BY7

The main advantage of trading using opposite Coca Cola and 437076BY7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, 437076BY7 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 437076BY7 will offset losses from the drop in 437076BY7's long position.
The idea behind The Coca Cola and HOME DEPOT INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

Other Complementary Tools

Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
CEOs Directory
Screen CEOs from public companies around the world