Correlation Between Coca Cola and PHILIP
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By analyzing existing cross correlation between The Coca Cola and PHILIP MORRIS INTL, you can compare the effects of market volatilities on Coca Cola and PHILIP 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 PHILIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and PHILIP.
Diversification Opportunities for Coca Cola and PHILIP
Very weak diversification
The 3 months correlation between Coca and PHILIP is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and PHILIP MORRIS INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHILIP MORRIS INTL 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 PHILIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHILIP MORRIS INTL has no effect on the direction of Coca Cola i.e., Coca Cola and PHILIP go up and down completely randomly.
Pair Corralation between Coca Cola and PHILIP
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.85 times more return on investment than PHILIP. However, The Coca Cola is 1.18 times less risky than PHILIP. It trades about 0.06 of its potential returns per unit of risk. PHILIP MORRIS INTL is currently generating about 0.0 per unit of risk. If you would invest 5,700 in The Coca Cola on September 2, 2024 and sell it today you would earn a total of 708.00 from holding The Coca Cola or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
The Coca Cola vs. PHILIP MORRIS INTL
Performance |
| Timeline |
| Coca Cola |
| PHILIP MORRIS INTL |
Coca Cola and PHILIP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and PHILIP
The main advantage of trading using opposite Coca Cola and PHILIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, PHILIP 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 PHILIP will offset losses from the drop in PHILIP'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 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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