Correlation Between Coca Cola and PRAXAIR
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By analyzing existing cross correlation between The Coca Cola and PRAXAIR INC 355, you can compare the effects of market volatilities on Coca Cola and PRAXAIR 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 PRAXAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and PRAXAIR.
Diversification Opportunities for Coca Cola and PRAXAIR
Modest diversification
The 3 months correlation between Coca and PRAXAIR is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and PRAXAIR INC 355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRAXAIR INC 355 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 PRAXAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRAXAIR INC 355 has no effect on the direction of Coca Cola i.e., Coca Cola and PRAXAIR go up and down completely randomly.
Pair Corralation between Coca Cola and PRAXAIR
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the PRAXAIR. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 2.0 times less risky than PRAXAIR. The stock trades about -0.16 of its potential returns per unit of risk. The PRAXAIR INC 355 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 8,170 in PRAXAIR INC 355 on August 29, 2024 and sell it today you would earn a total of 204.00 from holding PRAXAIR INC 355 or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 54.55% |
| Values | Daily Returns |
The Coca Cola vs. PRAXAIR INC 355
Performance |
| Timeline |
| Coca Cola |
| PRAXAIR INC 355 |
Coca Cola and PRAXAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and PRAXAIR
The main advantage of trading using opposite Coca Cola and PRAXAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, PRAXAIR 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 PRAXAIR will offset losses from the drop in PRAXAIR'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 |
| PRAXAIR vs. The Coca Cola | PRAXAIR vs. JPMorgan Chase Co | PRAXAIR vs. Dupont De Nemours | PRAXAIR vs. Alcoa 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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