Correlation Between Sherborne Investors and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Sherborne Investors 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 Sherborne Investors and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sherborne Investors Guernsey and Coca Cola Co, you can compare the effects of market volatilities on Sherborne Investors 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 Sherborne Investors with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherborne Investors and Coca Cola.
Diversification Opportunities for Sherborne Investors and Coca Cola
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sherborne and Coca is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sherborne Investors Guernsey and Coca Cola Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and Sherborne Investors 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 Sherborne Investors Guernsey 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 Sherborne Investors i.e., Sherborne Investors and Coca Cola go up and down completely randomly.
Pair Corralation between Sherborne Investors and Coca Cola
Assuming the 90 days trading horizon Sherborne Investors Guernsey is expected to under-perform the Coca Cola. In addition to that, Sherborne Investors is 1.18 times more volatile than Coca Cola Co. It trades about -0.06 of its total potential returns per unit of risk. Coca Cola Co is currently generating about 0.04 per unit of volatility. If you would invest 5,825 in Coca Cola Co on November 3, 2024 and sell it today you would earn a total of 480.00 from holding Coca Cola Co or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sherborne Investors Guernsey vs. Coca Cola Co
Performance |
| Timeline |
| Sherborne Investors |
| Coca Cola |
Sherborne Investors and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherborne Investors and Coca Cola
The main advantage of trading using opposite Sherborne Investors and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherborne Investors 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.| Sherborne Investors vs. Dairy Farm International | Sherborne Investors vs. The Mercantile Investment | Sherborne Investors vs. Premier Foods PLC | Sherborne Investors vs. Monks Investment Trust |
| Coca Cola vs. Gruppo MutuiOnline SpA | Coca Cola vs. Delta Air Lines | Coca Cola vs. Porvair plc | Coca Cola vs. Metro Bank PLC |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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