Correlation Between MACOM Technology and Coca Cola
Can any of the company-specific risk be diversified away by investing in both MACOM Technology 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 MACOM Technology and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MACOM Technology Solutions and The Coca Cola, you can compare the effects of market volatilities on MACOM Technology 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 MACOM Technology with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Coca Cola.
Diversification Opportunities for MACOM Technology and Coca Cola
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MACOM and Coca is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and MACOM Technology 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 MACOM Technology Solutions 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 MACOM Technology i.e., MACOM Technology and Coca Cola go up and down completely randomly.
Pair Corralation between MACOM Technology and Coca Cola
Given the investment horizon of 90 days MACOM Technology Solutions is expected to generate 2.86 times more return on investment than Coca Cola. However, MACOM Technology is 2.86 times more volatile than The Coca Cola. It trades about 0.07 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.02 per unit of risk. If you would invest 6,764 in MACOM Technology Solutions on August 24, 2024 and sell it today you would earn a total of 6,686 from holding MACOM Technology Solutions or generate 98.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. The Coca Cola
Performance |
| Timeline |
| MACOM Technology Sol |
| Coca Cola |
MACOM Technology and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Coca Cola
The main advantage of trading using opposite MACOM Technology and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology 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.| MACOM Technology vs. Eshallgo Class A | MACOM Technology vs. Amtech Systems | MACOM Technology vs. Gold Fields Ltd | MACOM Technology vs. Aegean Airlines SA |
| Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. Eshallgo Class A | Coca Cola vs. Amtech Systems | Coca Cola vs. Gold Fields Ltd |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| 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 | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |