Correlation Between Loma Negra and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Loma Negra and Coca Cola 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 Loma Negra and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loma Negra Compania and The Coca Cola, you can compare the effects of market volatilities on Loma Negra and Coca Cola 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 Loma Negra with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loma Negra and Coca Cola.
Diversification Opportunities for Loma Negra and Coca Cola
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Loma and Coca is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Loma Negra Compania and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and Loma Negra 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 Loma Negra Compania are associated (or correlated) with Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Loma Negra i.e., Loma Negra and Coca Cola go up and down completely randomly.
Pair Corralation between Loma Negra and Coca Cola
Assuming the 90 days trading horizon Loma Negra is expected to generate 12.01 times less return on investment than Coca Cola. In addition to that, Loma Negra is 2.4 times more volatile than The Coca Cola. It trades about 0.0 of its total potential returns per unit of risk. The Coca Cola is currently generating about 0.13 per unit of volatility. If you would invest 1,455,000 in The Coca Cola on November 2, 2024 and sell it today you would earn a total of 55,000 from holding The Coca Cola or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Loma Negra Compania vs. The Coca Cola
Performance |
| Timeline |
| Loma Negra Compania |
| Coca Cola |
Loma Negra and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loma Negra and Coca Cola
The main advantage of trading using opposite Loma Negra and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loma Negra position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Loma Negra vs. Agrometal SAI | Loma Negra vs. Transportadora de Gas | Loma Negra vs. Harmony Gold Mining | Loma Negra vs. United States Steel |
| Coca Cola vs. Grimoldi SA | Coca Cola vs. Transportadora de Gas | Coca Cola vs. Alphabet Inc Class A CEDEAR | Coca Cola vs. International Business Machines |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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