Correlation Between APPLE and Coca Cola
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By analyzing existing cross correlation between APPLE INC 29 and The Coca Cola, you can compare the effects of market volatilities on APPLE 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 APPLE with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLE and Coca Cola.
Diversification Opportunities for APPLE and Coca Cola
Very poor diversification
The 3 months correlation between APPLE and Coca is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding APPLE INC 29 and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and APPLE 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 APPLE INC 29 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 APPLE i.e., APPLE and Coca Cola go up and down completely randomly.
Pair Corralation between APPLE and Coca Cola
Assuming the 90 days trading horizon APPLE INC 29 is expected to generate 0.42 times more return on investment than Coca Cola. However, APPLE INC 29 is 2.39 times less risky than Coca Cola. It trades about -0.24 of its potential returns per unit of risk. The Coca Cola is currently generating about -0.29 per unit of risk. If you would invest 9,794 in APPLE INC 29 on August 30, 2024 and sell it today you would lose (343.00) from holding APPLE INC 29 or give up 3.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
APPLE INC 29 vs. The Coca Cola
Performance |
| Timeline |
| APPLE INC 29 |
| Coca Cola |
APPLE and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APPLE and Coca Cola
The main advantage of trading using opposite APPLE and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLE 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.| APPLE vs. Burlington Stores | APPLE vs. Insteel Industries | APPLE vs. Tianjin Capital Environmental | APPLE vs. Figs Inc |
| Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. PepsiCo | Coca Cola vs. Coca Cola Femsa SAB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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