Correlation Between Coca Cola and LEGGETT
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By analyzing existing cross correlation between The Coca Cola and LEGGETT PLATT INC, you can compare the effects of market volatilities on Coca Cola and LEGGETT 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 LEGGETT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and LEGGETT.
Diversification Opportunities for Coca Cola and LEGGETT
Poor diversification
The 3 months correlation between Coca and LEGGETT is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and LEGGETT PLATT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEGGETT PLATT 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 LEGGETT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEGGETT PLATT INC has no effect on the direction of Coca Cola i.e., Coca Cola and LEGGETT go up and down completely randomly.
Pair Corralation between Coca Cola and LEGGETT
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 1.3 times more return on investment than LEGGETT. However, Coca Cola is 1.3 times more volatile than LEGGETT PLATT INC. It trades about -0.06 of its potential returns per unit of risk. LEGGETT PLATT INC is currently generating about -0.08 per unit of risk. If you would invest 6,482 in The Coca Cola on September 1, 2024 and sell it today you would lose (74.00) from holding The Coca Cola or give up 1.14% 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. LEGGETT PLATT INC
Performance |
| Timeline |
| Coca Cola |
| LEGGETT PLATT INC |
Coca Cola and LEGGETT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and LEGGETT
The main advantage of trading using opposite Coca Cola and LEGGETT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, LEGGETT 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 LEGGETT will offset losses from the drop in LEGGETT's long position.| Coca Cola vs. Vita Coco | Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Embotelladora Andina SA | Coca Cola vs. National Beverage Corp |
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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