Correlation Between Coca Cola and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Coca Cola and SPDR SP 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 SPDR SP 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 SPDR SP 1500, you can compare the effects of market volatilities on Coca Cola and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and SPDR SP.
Diversification Opportunities for Coca Cola and SPDR SP
Pay attention - limited upside
The 3 months correlation between Coca and SPDR is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and SPDR SP 1500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 1500 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 1500 has no effect on the direction of Coca Cola i.e., Coca Cola and SPDR SP go up and down completely randomly.
Pair Corralation between Coca Cola and SPDR SP
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the SPDR SP. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 1.03 times less risky than SPDR SP. The stock trades about -0.06 of its potential returns per unit of risk. The SPDR SP 1500 is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 18,315 in SPDR SP 1500 on September 1, 2024 and sell it today you would earn a total of 1,254 from holding SPDR SP 1500 or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Coca Cola vs. SPDR SP 1500
Performance |
| Timeline |
| Coca Cola |
| SPDR SP 1500 |
Coca Cola and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and SPDR SP
The main advantage of trading using opposite Coca Cola and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Coca Cola vs. Vita Coco | Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Embotelladora Andina SA | Coca Cola vs. National Beverage Corp |
| SPDR SP vs. iShares Core SP | SPDR SP vs. iShares Core MSCI | SPDR SP vs. iShares Broad USD | SPDR SP vs. iShares Core SP |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |