Correlation Between Coca Cola and NOVARTIS
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By analyzing existing cross correlation between The Coca Cola and NOVARTIS CAPITAL P, you can compare the effects of market volatilities on Coca Cola and NOVARTIS 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 NOVARTIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and NOVARTIS.
Diversification Opportunities for Coca Cola and NOVARTIS
Poor diversification
The 3 months correlation between Coca and NOVARTIS is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and NOVARTIS CAPITAL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVARTIS CAPITAL P 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 NOVARTIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVARTIS CAPITAL P has no effect on the direction of Coca Cola i.e., Coca Cola and NOVARTIS go up and down completely randomly.
Pair Corralation between Coca Cola and NOVARTIS
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.59 times more return on investment than NOVARTIS. However, The Coca Cola is 1.68 times less risky than NOVARTIS. It trades about 0.06 of its potential returns per unit of risk. NOVARTIS CAPITAL P is currently generating about 0.02 per unit of risk. If you would invest 5,682 in The Coca Cola on September 19, 2024 and sell it today you would earn a total of 658.00 from holding The Coca Cola or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.26% |
| Values | Daily Returns |
The Coca Cola vs. NOVARTIS CAPITAL P
Performance |
| Timeline |
| Coca Cola |
| NOVARTIS CAPITAL P |
Coca Cola and NOVARTIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and NOVARTIS
The main advantage of trading using opposite Coca Cola and NOVARTIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, NOVARTIS 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 NOVARTIS will offset losses from the drop in NOVARTIS's long position.| Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Coca Cola European Partners | Coca Cola vs. Coca Cola Consolidated |
| NOVARTIS vs. WPP PLC ADR | NOVARTIS vs. Deluxe | NOVARTIS vs. Grocery Outlet Holding | NOVARTIS vs. Cedar Realty Trust |
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.
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