Correlation Between Occidental and Coca Cola
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By analyzing existing cross correlation between Occidental Petroleum 795 and The Coca Cola, you can compare the effects of market volatilities on Occidental 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 Occidental with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Occidental and Coca Cola.
Diversification Opportunities for Occidental and Coca Cola
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Occidental and Coca is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Occidental Petroleum 795 and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and Occidental 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 Occidental Petroleum 795 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 Occidental i.e., Occidental and Coca Cola go up and down completely randomly.
Pair Corralation between Occidental and Coca Cola
Assuming the 90 days trading horizon Occidental Petroleum 795 is expected to generate 66.89 times more return on investment than Coca Cola. However, Occidental is 66.89 times more volatile than The Coca Cola. It trades about 0.05 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.04 per unit of risk. If you would invest 11,222 in Occidental Petroleum 795 on August 31, 2024 and sell it today you would lose (86.00) from holding Occidental Petroleum 795 or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.7% |
| Values | Daily Returns |
Occidental Petroleum 795 vs. The Coca Cola
Performance |
| Timeline |
| Occidental Petroleum 795 |
| Coca Cola |
Occidental and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Occidental and Coca Cola
The main advantage of trading using opposite Occidental and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Occidental 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.| Occidental vs. AEP TEX INC | Occidental vs. US BANK NATIONAL | Occidental vs. Bank of America | Occidental 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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