Correlation Between NORFOLK and Coca Cola
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By analyzing existing cross correlation between NORFOLK SOUTHN P and The Coca Cola, you can compare the effects of market volatilities on NORFOLK 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 NORFOLK with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORFOLK and Coca Cola.
Diversification Opportunities for NORFOLK and Coca Cola
Weak diversification
The 3 months correlation between NORFOLK and Coca is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding NORFOLK SOUTHN 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 NORFOLK 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 NORFOLK SOUTHN 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 NORFOLK i.e., NORFOLK and Coca Cola go up and down completely randomly.
Pair Corralation between NORFOLK and Coca Cola
Assuming the 90 days trading horizon NORFOLK SOUTHN P is expected to generate 0.81 times more return on investment than Coca Cola. However, NORFOLK SOUTHN P is 1.24 times less risky than Coca Cola. It trades about 0.04 of its potential returns per unit of risk. The Coca Cola is currently generating about -0.12 per unit of risk. If you would invest 10,318 in NORFOLK SOUTHN P on August 31, 2024 and sell it today you would earn a total of 33.00 from holding NORFOLK SOUTHN P or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 63.64% |
| Values | Daily Returns |
NORFOLK SOUTHN P vs. The Coca Cola
Performance |
| Timeline |
| NORFOLK SOUTHN P |
| Coca Cola |
NORFOLK and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORFOLK and Coca Cola
The main advantage of trading using opposite NORFOLK and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORFOLK 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.| NORFOLK vs. Taiwan Semiconductor Manufacturing | NORFOLK vs. Globalfoundries | NORFOLK vs. Elmos Semiconductor SE | NORFOLK vs. Analog Devices |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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