Correlation Between BOEING and Coca Cola
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By analyzing existing cross correlation between BOEING CO and The Coca Cola, you can compare the effects of market volatilities on BOEING 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 BOEING with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOEING and Coca Cola.
Diversification Opportunities for BOEING and Coca Cola
Poor diversification
The 3 months correlation between BOEING and Coca is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BOEING CO and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and BOEING 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 BOEING CO 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 BOEING i.e., BOEING and Coca Cola go up and down completely randomly.
Pair Corralation between BOEING and Coca Cola
Assuming the 90 days trading horizon BOEING is expected to generate 9.25 times less return on investment than Coca Cola. But when comparing it to its historical volatility, BOEING CO is 1.71 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 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,648 in The Coca Cola on August 25, 2024 and sell it today you would earn a total of 744.00 from holding The Coca Cola or generate 13.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
BOEING CO vs. The Coca Cola
Performance |
| Timeline |
| BOEING CO |
| Coca Cola |
BOEING and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOEING and Coca Cola
The main advantage of trading using opposite BOEING and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOEING 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.| BOEING vs. The Coca Cola | BOEING vs. JPMorgan Chase Co | BOEING vs. Dupont De Nemours | BOEING vs. Alcoa Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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