Correlation Between NISSIN FOODS and Coca Cola
Can any of the company-specific risk be diversified away by investing in both NISSIN FOODS 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 NISSIN FOODS and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NISSIN FOODS HLDGS and Coca Cola HBC, you can compare the effects of market volatilities on NISSIN FOODS 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 NISSIN FOODS with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSIN FOODS and Coca Cola.
Diversification Opportunities for NISSIN FOODS and Coca Cola
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between NISSIN and Coca is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NISSIN FOODS HLDGS and Coca Cola HBC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola HBC and NISSIN FOODS 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 NISSIN FOODS HLDGS 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 HBC has no effect on the direction of NISSIN FOODS i.e., NISSIN FOODS and Coca Cola go up and down completely randomly.
Pair Corralation between NISSIN FOODS and Coca Cola
Assuming the 90 days trading horizon NISSIN FOODS HLDGS is expected to under-perform the Coca Cola. In addition to that, NISSIN FOODS is 1.04 times more volatile than Coca Cola HBC. It trades about -0.04 of its total potential returns per unit of risk. Coca Cola HBC is currently generating about 0.08 per unit of volatility. If you would invest 2,550 in Coca Cola HBC on September 14, 2024 and sell it today you would earn a total of 820.00 from holding Coca Cola HBC or generate 32.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NISSIN FOODS HLDGS vs. Coca Cola HBC
Performance |
| Timeline |
| NISSIN FOODS HLDGS |
| Coca Cola HBC |
NISSIN FOODS and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSIN FOODS and Coca Cola
The main advantage of trading using opposite NISSIN FOODS and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSIN FOODS 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.| NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc |
| Coca Cola vs. Darden Restaurants | Coca Cola vs. Entravision Communications | Coca Cola vs. Verizon Communications | Coca Cola vs. Zoom Video Communications |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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