Correlation Between Rheinmetall and Coca Cola
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By analyzing existing cross correlation between Rheinmetall AG and The Coca Cola, you can compare the effects of market volatilities on Rheinmetall 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 Rheinmetall with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and Coca Cola.
Diversification Opportunities for Rheinmetall and Coca Cola
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rheinmetall and Coca is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and Rheinmetall 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 Rheinmetall AG 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 Rheinmetall i.e., Rheinmetall and Coca Cola go up and down completely randomly.
Pair Corralation between Rheinmetall and Coca Cola
Assuming the 90 days horizon Rheinmetall AG is expected to generate 2.13 times more return on investment than Coca Cola. However, Rheinmetall is 2.13 times more volatile than The Coca Cola. It trades about 0.13 of its potential returns per unit of risk. The Coca Cola is currently generating about -0.13 per unit of risk. If you would invest 62,400 in Rheinmetall AG on October 13, 2024 and sell it today you would earn a total of 2,580 from holding Rheinmetall AG or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Rheinmetall AG vs. The Coca Cola
Performance |
| Timeline |
| Rheinmetall AG |
| Coca Cola |
Rheinmetall and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and Coca Cola
The main advantage of trading using opposite Rheinmetall and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall 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.| Rheinmetall vs. New Residential Investment | Rheinmetall vs. Federal Agricultural Mortgage | Rheinmetall vs. Guangdong Investment Limited | Rheinmetall vs. Tokyu Construction Co |
| Coca Cola vs. Harmony Gold Mining | Coca Cola vs. Monument Mining Limited | Coca Cola vs. Forsys Metals Corp | Coca Cola vs. Jacquet Metal Service |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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