Correlation Between Coca Cola and NUCOR
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By analyzing existing cross correlation between The Coca Cola and NUCOR P 395, you can compare the effects of market volatilities on Coca Cola and NUCOR 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 NUCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and NUCOR.
Diversification Opportunities for Coca Cola and NUCOR
Poor diversification
The 3 months correlation between Coca and NUCOR is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and NUCOR P 395 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NUCOR P 5 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 NUCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NUCOR P 5 has no effect on the direction of Coca Cola i.e., Coca Cola and NUCOR go up and down completely randomly.
Pair Corralation between Coca Cola and NUCOR
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 2.97 times more return on investment than NUCOR. However, Coca Cola is 2.97 times more volatile than NUCOR P 395. It trades about 0.03 of its potential returns per unit of risk. NUCOR P 395 is currently generating about 0.01 per unit of risk. If you would invest 6,254 in The Coca Cola on September 2, 2024 and sell it today you would earn a total of 154.00 from holding The Coca Cola or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
The Coca Cola vs. NUCOR P 395
Performance |
| Timeline |
| Coca Cola |
| NUCOR P 5 |
Coca Cola and NUCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and NUCOR
The main advantage of trading using opposite Coca Cola and NUCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, NUCOR 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 NUCOR will offset losses from the drop in NUCOR's long position.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
| NUCOR vs. Stepan Company | NUCOR vs. Chemours Co | NUCOR vs. Arrow Electronics | NUCOR vs. Hudson Technologies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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