Correlation Between Pinterest and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Pinterest 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 Pinterest and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinterest and The Coca Cola, you can compare the effects of market volatilities on Pinterest 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 Pinterest with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and Coca Cola.
Diversification Opportunities for Pinterest and Coca Cola
Average diversification
The 3 months correlation between Pinterest and Coca is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and Pinterest 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 Pinterest 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 Pinterest i.e., Pinterest and Coca Cola go up and down completely randomly.
Pair Corralation between Pinterest and Coca Cola
Given the investment horizon of 90 days Pinterest is expected to under-perform the Coca Cola. In addition to that, Pinterest is 4.45 times more volatile than The Coca Cola. It trades about -0.04 of its total potential returns per unit of risk. The Coca Cola is currently generating about -0.06 per unit of volatility. If you would invest 6,482 in The Coca Cola on September 1, 2024 and sell it today you would lose (74.00) from holding The Coca Cola or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinterest vs. The Coca Cola
Performance |
| Timeline |
| Coca Cola |
Pinterest and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinterest and Coca Cola
The main advantage of trading using opposite Pinterest and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest 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.| Pinterest vs. MediaAlpha | Pinterest vs. Asset Entities Class | Pinterest vs. Shutterstock | Pinterest vs. Match Group |
| Coca Cola vs. Vita Coco | Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Embotelladora Andina SA | Coca Cola vs. National Beverage Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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