Correlation Between ASTRAZENECA and Coca Cola
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By analyzing existing cross correlation between ASTRAZENECA PLC 4 and The Coca Cola, you can compare the effects of market volatilities on ASTRAZENECA 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 ASTRAZENECA with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTRAZENECA and Coca Cola.
Diversification Opportunities for ASTRAZENECA and Coca Cola
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ASTRAZENECA and Coca is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ASTRAZENECA PLC 4 and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and ASTRAZENECA 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 ASTRAZENECA PLC 4 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 ASTRAZENECA i.e., ASTRAZENECA and Coca Cola go up and down completely randomly.
Pair Corralation between ASTRAZENECA and Coca Cola
Assuming the 90 days trading horizon ASTRAZENECA is expected to generate 8.87 times less return on investment than Coca Cola. But when comparing it to its historical volatility, ASTRAZENECA PLC 4 is 1.99 times less risky than Coca Cola. It trades about 0.01 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,722 in The Coca Cola on August 31, 2024 and sell it today you would earn a total of 686.00 from holding The Coca Cola or generate 11.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.13% |
| Values | Daily Returns |
ASTRAZENECA PLC 4 vs. The Coca Cola
Performance |
| Timeline |
| ASTRAZENECA PLC 4 |
| Coca Cola |
ASTRAZENECA and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASTRAZENECA and Coca Cola
The main advantage of trading using opposite ASTRAZENECA and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTRAZENECA 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.| ASTRAZENECA vs. AEP TEX INC | ASTRAZENECA vs. US BANK NATIONAL | ASTRAZENECA vs. Bank of America | ASTRAZENECA vs. GE Aerospace |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. RLJ Lodging Trust | Coca Cola vs. Aquagold International | Coca Cola vs. Stepstone Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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