Correlation Between Coca Cola and PFIZER
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By analyzing existing cross correlation between The Coca Cola and PFIZER INC, you can compare the effects of market volatilities on Coca Cola and PFIZER 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 PFIZER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and PFIZER.
Diversification Opportunities for Coca Cola and PFIZER
Weak diversification
The 3 months correlation between Coca and PFIZER is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and PFIZER INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFIZER 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 PFIZER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFIZER INC has no effect on the direction of Coca Cola i.e., Coca Cola and PFIZER go up and down completely randomly.
Pair Corralation between Coca Cola and PFIZER
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.65 times more return on investment than PFIZER. However, The Coca Cola is 1.55 times less risky than PFIZER. It trades about -0.12 of its potential returns per unit of risk. PFIZER INC is currently generating about -0.23 per unit of risk. If you would invest 6,592 in The Coca Cola on August 31, 2024 and sell it today you would lose (149.00) from holding The Coca Cola or give up 2.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
The Coca Cola vs. PFIZER INC
Performance |
| Timeline |
| Coca Cola |
| PFIZER INC |
Coca Cola and PFIZER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and PFIZER
The main advantage of trading using opposite Coca Cola and PFIZER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, PFIZER 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 PFIZER will offset losses from the drop in PFIZER'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 |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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