Correlation Between Coca Cola and Boeing
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Boeing 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 Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola Femsa SAB and The Boeing, you can compare the effects of market volatilities on Coca Cola and Boeing 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 Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Boeing.
Diversification Opportunities for Coca Cola and Boeing
Very weak diversification
The 3 months correlation between Coca and Boeing is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Femsa SAB and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing 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 Coca Cola Femsa SAB are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of Coca Cola i.e., Coca Cola and Boeing go up and down completely randomly.
Pair Corralation between Coca Cola and Boeing
Considering the 90-day investment horizon Coca Cola Femsa SAB is expected to generate 0.75 times more return on investment than Boeing. However, Coca Cola Femsa SAB is 1.34 times less risky than Boeing. It trades about 0.0 of its potential returns per unit of risk. The Boeing is currently generating about -0.07 per unit of risk. If you would invest 8,277 in Coca Cola Femsa SAB on August 24, 2024 and sell it today you would lose (386.50) from holding Coca Cola Femsa SAB or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola Femsa SAB vs. The Boeing
Performance |
| Timeline |
| Coca Cola Femsa |
| Boeing |
Coca Cola and Boeing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Boeing
The main advantage of trading using opposite Coca Cola and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.| Coca Cola vs. The Coca Cola | Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Keurig Dr Pepper |
| Boeing vs. Coca Cola Consolidated | Boeing vs. Koppers Holdings | Boeing vs. Coca Cola Femsa SAB | Boeing vs. Know Labs |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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