Correlation Between Coca Cola and Uwharrie Capital
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Uwharrie Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Coca Cola and Uwharrie Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and Uwharrie Capital Corp, you can compare the effects of market volatilities on Coca Cola and Uwharrie Capital 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 Uwharrie Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Uwharrie Capital.
Diversification Opportunities for Coca Cola and Uwharrie Capital
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Uwharrie is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Uwharrie Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uwharrie Capital Corp 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 Uwharrie Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uwharrie Capital Corp has no effect on the direction of Coca Cola i.e., Coca Cola and Uwharrie Capital go up and down completely randomly.
Pair Corralation between Coca Cola and Uwharrie Capital
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Uwharrie Capital. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 1.92 times less risky than Uwharrie Capital. The stock trades about -0.29 of its potential returns per unit of risk. The Uwharrie Capital Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 770.00 in Uwharrie Capital Corp on August 25, 2024 and sell it today you would earn a total of 60.00 from holding Uwharrie Capital Corp or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Uwharrie Capital Corp
Performance |
| Timeline |
| Coca Cola |
| Uwharrie Capital Corp |
Coca Cola and Uwharrie Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Uwharrie Capital
The main advantage of trading using opposite Coca Cola and Uwharrie Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Uwharrie Capital 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 Uwharrie Capital will offset losses from the drop in Uwharrie Capital's long position.The idea behind The Coca Cola and Uwharrie Capital Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Uwharrie Capital vs. ENB Financial Corp | Uwharrie Capital vs. First Reliance Bancshares | Uwharrie Capital vs. Oak Ridge Financial | Uwharrie Capital vs. Glen Burnie Bancorp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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