Correlation Between Coca Cola and SIMON
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By analyzing existing cross correlation between The Coca Cola and SIMON PPTY GROUP, you can compare the effects of market volatilities on Coca Cola and SIMON 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 SIMON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and SIMON.
Diversification Opportunities for Coca Cola and SIMON
Poor diversification
The 3 months correlation between Coca and SIMON is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and SIMON PPTY GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMON PPTY GROUP 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 SIMON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMON PPTY GROUP has no effect on the direction of Coca Cola i.e., Coca Cola and SIMON go up and down completely randomly.
Pair Corralation between Coca Cola and SIMON
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.6 times more return on investment than SIMON. However, The Coca Cola is 1.66 times less risky than SIMON. It trades about -0.12 of its potential returns per unit of risk. SIMON PPTY GROUP is currently generating about -0.22 per unit of risk. If you would invest 6,667 in The Coca Cola on August 29, 2024 and sell it today you would lose (176.00) from holding The Coca Cola or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
The Coca Cola vs. SIMON PPTY GROUP
Performance |
| Timeline |
| Coca Cola |
| SIMON PPTY GROUP |
Coca Cola and SIMON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and SIMON
The main advantage of trading using opposite Coca Cola and SIMON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, SIMON 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 SIMON will offset losses from the drop in SIMON's long position.| Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola European Partners | Coca Cola vs. Capital Income Builder | Coca Cola vs. Direxion Daily FTSE |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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