Correlation Between Coca Cola and HONEYWELL
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By analyzing existing cross correlation between The Coca Cola and HONEYWELL INTL INC, you can compare the effects of market volatilities on Coca Cola and HONEYWELL 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 HONEYWELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and HONEYWELL.
Diversification Opportunities for Coca Cola and HONEYWELL
Very poor diversification
The 3 months correlation between Coca and HONEYWELL is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and HONEYWELL INTL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HONEYWELL INTL 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 HONEYWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HONEYWELL INTL INC has no effect on the direction of Coca Cola i.e., Coca Cola and HONEYWELL go up and down completely randomly.
Pair Corralation between Coca Cola and HONEYWELL
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 2.97 times more return on investment than HONEYWELL. However, Coca Cola is 2.97 times more volatile than HONEYWELL INTL INC. It trades about 0.04 of its potential returns per unit of risk. HONEYWELL INTL INC is currently generating about 0.03 per unit of risk. If you would invest 5,722 in The Coca Cola on August 31, 2024 and sell it today you would earn a total of 686.00 from holding The Coca Cola or generate 11.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
The Coca Cola vs. HONEYWELL INTL INC
Performance |
| Timeline |
| Coca Cola |
| HONEYWELL INTL INC |
Coca Cola and HONEYWELL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and HONEYWELL
The main advantage of trading using opposite Coca Cola and HONEYWELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, HONEYWELL 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 HONEYWELL will offset losses from the drop in HONEYWELL's long position.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. RLJ Lodging Trust | Coca Cola vs. Aquagold International | Coca Cola vs. Stepstone Group |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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