Correlation Between Coca Cola and LOEWS
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By analyzing existing cross correlation between The Coca Cola and LOEWS P 6, you can compare the effects of market volatilities on Coca Cola and LOEWS 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 LOEWS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and LOEWS.
Diversification Opportunities for Coca Cola and LOEWS
Very poor diversification
The 3 months correlation between Coca and LOEWS is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and LOEWS P 6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOEWS P 6 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 LOEWS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOEWS P 6 has no effect on the direction of Coca Cola i.e., Coca Cola and LOEWS go up and down completely randomly.
Pair Corralation between Coca Cola and LOEWS
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.9 times more return on investment than LOEWS. However, The Coca Cola is 1.11 times less risky than LOEWS. It trades about 0.03 of its potential returns per unit of risk. LOEWS P 6 is currently generating about 0.02 per unit of risk. If you would invest 5,963 in The Coca Cola on August 26, 2024 and sell it today you would earn a total of 429.00 from holding The Coca Cola or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 81.68% |
| Values | Daily Returns |
The Coca Cola vs. LOEWS P 6
Performance |
| Timeline |
| Coca Cola |
| LOEWS P 6 |
Coca Cola and LOEWS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and LOEWS
The main advantage of trading using opposite Coca Cola and LOEWS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, LOEWS 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 LOEWS will offset losses from the drop in LOEWS's long position.The idea behind The Coca Cola and LOEWS P 6 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.| LOEWS vs. AEP TEX INC | LOEWS vs. US BANK NATIONAL | LOEWS vs. Eat Beyond Global | LOEWS vs. Charles Schwab 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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