Correlation Between Coca Cola and Koppers Holdings
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Koppers Holdings 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 Koppers Holdings 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 Koppers Holdings, you can compare the effects of market volatilities on Coca Cola and Koppers Holdings 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 Koppers Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Koppers Holdings.
Diversification Opportunities for Coca Cola and Koppers Holdings
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coca and Koppers is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Femsa SAB and Koppers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koppers Holdings 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 Koppers Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koppers Holdings has no effect on the direction of Coca Cola i.e., Coca Cola and Koppers Holdings go up and down completely randomly.
Pair Corralation between Coca Cola and Koppers Holdings
Considering the 90-day investment horizon Coca Cola is expected to generate 5.44 times less return on investment than Koppers Holdings. But when comparing it to its historical volatility, Coca Cola Femsa SAB is 1.45 times less risky than Koppers Holdings. It trades about 0.01 of its potential returns per unit of risk. Koppers Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,332 in Koppers Holdings on August 28, 2024 and sell it today you would earn a total of 570.00 from holding Koppers Holdings or generate 17.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola Femsa SAB vs. Koppers Holdings
Performance |
| Timeline |
| Coca Cola Femsa |
| Koppers Holdings |
Coca Cola and Koppers Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Koppers Holdings
The main advantage of trading using opposite Coca Cola and Koppers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Koppers Holdings 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 Koppers Holdings will offset losses from the drop in Koppers Holdings' long position.| Coca Cola vs. Fomento Economico Mexicano | Coca Cola vs. Grupo Televisa SAB | Coca Cola vs. Grupo Aeroportuario del | Coca Cola vs. Grupo Aeroportuario del |
| Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Innospec | Koppers Holdings vs. H B Fuller |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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