Correlation Between NYSE Composite and Coca Cola
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Coca Cola Femsa SAB, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Coca Cola.
Diversification Opportunities for NYSE Composite and Coca Cola
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Coca is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Coca Cola Femsa SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Femsa and NYSE Composite 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 NYSE Composite 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 Femsa has no effect on the direction of NYSE Composite i.e., NYSE Composite and Coca Cola go up and down completely randomly.
Pair Corralation between NYSE Composite and Coca Cola
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.46 times more return on investment than Coca Cola. However, NYSE Composite is 2.18 times less risky than Coca Cola. It trades about 0.12 of its potential returns per unit of risk. Coca Cola Femsa SAB is currently generating about -0.05 per unit of risk. If you would invest 1,929,223 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 91,759 from holding NYSE Composite or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Coca Cola Femsa SAB
Performance |
| Timeline |
NYSE Composite and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Coca Cola Femsa SAB
Pair trading matchups for Coca Cola
Pair Trading with NYSE Composite and Coca Cola
The main advantage of trading using opposite NYSE Composite and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Coca Cola vs. Fomento Economico Mexicano | Coca Cola vs. Grupo Televisa SAB | Coca Cola vs. Grupo Aeroportuario del | Coca Cola vs. Grupo Aeroportuario del |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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