Correlation Between Coca Cola and Safety Shot
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Safety Shot 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 Safety Shot 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 Safety Shot, you can compare the effects of market volatilities on Coca Cola and Safety Shot 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 Safety Shot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Safety Shot.
Diversification Opportunities for Coca Cola and Safety Shot
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coca and Safety is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Femsa SAB and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot 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 Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Coca Cola i.e., Coca Cola and Safety Shot go up and down completely randomly.
Pair Corralation between Coca Cola and Safety Shot
Considering the 90-day investment horizon Coca Cola Femsa SAB is expected to generate 0.23 times more return on investment than Safety Shot. However, Coca Cola Femsa SAB is 4.4 times less risky than Safety Shot. It trades about -0.01 of its potential returns per unit of risk. Safety Shot is currently generating about -0.05 per unit of risk. If you would invest 8,560 in Coca Cola Femsa SAB on September 2, 2024 and sell it today you would lose (597.00) from holding Coca Cola Femsa SAB or give up 6.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola Femsa SAB vs. Safety Shot
Performance |
| Timeline |
| Coca Cola Femsa |
| Safety Shot |
Coca Cola and Safety Shot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Safety Shot
The main advantage of trading using opposite Coca Cola and Safety Shot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Safety Shot 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 Safety Shot will offset losses from the drop in Safety Shot's 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 |
| Safety Shot vs. Regeneron Pharmaceuticals | Safety Shot vs. Bright Scholar Education | Safety Shot vs. Valneva SE ADR | Safety Shot vs. Mink Therapeutics |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| 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 | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |