Correlation Between BAIDU and Coca Cola
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By analyzing existing cross correlation between BAIDU INC 4125 and The Coca Cola, you can compare the effects of market volatilities on BAIDU 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 BAIDU with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIDU and Coca Cola.
Diversification Opportunities for BAIDU and Coca Cola
Pay attention - limited upside
The 3 months correlation between BAIDU and Coca is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding BAIDU INC 4125 and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and BAIDU 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 BAIDU INC 4125 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 BAIDU i.e., BAIDU and Coca Cola go up and down completely randomly.
Pair Corralation between BAIDU and Coca Cola
Assuming the 90 days trading horizon BAIDU INC 4125 is expected to generate 121.09 times more return on investment than Coca Cola. However, BAIDU is 121.09 times more volatile than The Coca Cola. It trades about 0.09 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.02 per unit of risk. If you would invest 9,711 in BAIDU INC 4125 on August 30, 2024 and sell it today you would earn a total of 148.00 from holding BAIDU INC 4125 or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 20.56% |
| Values | Daily Returns |
BAIDU INC 4125 vs. The Coca Cola
Performance |
| Timeline |
| BAIDU INC 4125 |
| Coca Cola |
BAIDU and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAIDU and Coca Cola
The main advantage of trading using opposite BAIDU and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIDU 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.| BAIDU vs. Scandinavian Tobacco Group | BAIDU vs. Vita Coco | BAIDU vs. Compania Cervecerias Unidas | BAIDU vs. Waste Management |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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