Correlation Between Coca Cola and SOUTHERN
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By analyzing existing cross correlation between The Coca Cola and SOUTHERN CALIFORNIA EDISON, you can compare the effects of market volatilities on Coca Cola and SOUTHERN 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 SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and SOUTHERN.
Diversification Opportunities for Coca Cola and SOUTHERN
Poor diversification
The 3 months correlation between Coca and SOUTHERN is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and SOUTHERN CALIFORNIA EDISON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN CALIFORNIA 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN CALIFORNIA has no effect on the direction of Coca Cola i.e., Coca Cola and SOUTHERN go up and down completely randomly.
Pair Corralation between Coca Cola and SOUTHERN
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 398.43 times less return on investment than SOUTHERN. But when comparing it to its historical volatility, The Coca Cola is 97.12 times less risky than SOUTHERN. It trades about 0.02 of its potential returns per unit of risk. SOUTHERN CALIFORNIA EDISON is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,706 in SOUTHERN CALIFORNIA EDISON on September 12, 2024 and sell it today you would lose (434.00) from holding SOUTHERN CALIFORNIA EDISON or give up 6.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 63.84% |
| Values | Daily Returns |
The Coca Cola vs. SOUTHERN CALIFORNIA EDISON
Performance |
| Timeline |
| Coca Cola |
| SOUTHERN CALIFORNIA |
Coca Cola and SOUTHERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and SOUTHERN
The main advantage of trading using opposite Coca Cola and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN'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 |
| SOUTHERN vs. Cedar Realty Trust | SOUTHERN vs. Sphere Entertainment Co | SOUTHERN vs. Arhaus Inc | SOUTHERN vs. Zhihu Inc ADR |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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