Correlation Between Coca Cola and GraniteShares XOUT
Can any of the company-specific risk be diversified away by investing in both Coca Cola and GraniteShares XOUT 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 GraniteShares XOUT 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 GraniteShares XOUT Large, you can compare the effects of market volatilities on Coca Cola and GraniteShares XOUT 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 GraniteShares XOUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and GraniteShares XOUT.
Diversification Opportunities for Coca Cola and GraniteShares XOUT
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coca and GraniteShares is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and GraniteShares XOUT Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares XOUT Large 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 GraniteShares XOUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares XOUT Large has no effect on the direction of Coca Cola i.e., Coca Cola and GraniteShares XOUT go up and down completely randomly.
Pair Corralation between Coca Cola and GraniteShares XOUT
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 1.13 times more return on investment than GraniteShares XOUT. However, Coca Cola is 1.13 times more volatile than GraniteShares XOUT Large. It trades about 0.27 of its potential returns per unit of risk. GraniteShares XOUT Large is currently generating about 0.02 per unit of risk. If you would invest 6,203 in The Coca Cola on November 30, 2024 and sell it today you would earn a total of 918.00 from holding The Coca Cola or generate 14.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. GraniteShares XOUT Large
Performance |
| Timeline |
| Coca Cola |
| GraniteShares XOUT Large |
Coca Cola and GraniteShares XOUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and GraniteShares XOUT
The main advantage of trading using opposite Coca Cola and GraniteShares XOUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, GraniteShares XOUT 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 GraniteShares XOUT will offset losses from the drop in GraniteShares XOUT's long position.| Coca Cola vs. Vita Coco | Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. PepsiCo | Coca Cola vs. Coca Cola Femsa SAB |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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