Correlation Between DOLLAR and Coca Cola
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By analyzing existing cross correlation between DOLLAR GEN P and The Coca Cola, you can compare the effects of market volatilities on DOLLAR 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 DOLLAR with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOLLAR and Coca Cola.
Diversification Opportunities for DOLLAR and Coca Cola
Poor diversification
The 3 months correlation between DOLLAR and Coca is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding DOLLAR GEN P and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and DOLLAR 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 DOLLAR GEN P 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 DOLLAR i.e., DOLLAR and Coca Cola go up and down completely randomly.
Pair Corralation between DOLLAR and Coca Cola
Assuming the 90 days trading horizon DOLLAR GEN P is expected to generate 0.58 times more return on investment than Coca Cola. However, DOLLAR GEN P is 1.71 times less risky than Coca Cola. It trades about -0.22 of its potential returns per unit of risk. The Coca Cola is currently generating about -0.17 per unit of risk. If you would invest 9,765 in DOLLAR GEN P on August 28, 2024 and sell it today you would lose (229.00) from holding DOLLAR GEN P or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
DOLLAR GEN P vs. The Coca Cola
Performance |
| Timeline |
| DOLLAR GEN P |
| Coca Cola |
DOLLAR and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DOLLAR and Coca Cola
The main advantage of trading using opposite DOLLAR and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOLLAR 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.| DOLLAR vs. The Coca Cola | DOLLAR vs. JPMorgan Chase Co | DOLLAR vs. Dupont De Nemours | DOLLAR vs. Alcoa Corp |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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