Correlation Between SOUTHERN and Coca Cola
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By analyzing existing cross correlation between SOUTHERN PER CORP and The Coca Cola, you can compare the effects of market volatilities on SOUTHERN 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 SOUTHERN with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHERN and Coca Cola.
Diversification Opportunities for SOUTHERN and Coca Cola
Very weak diversification
The 3 months correlation between SOUTHERN and Coca is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN PER CORP and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and SOUTHERN 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 SOUTHERN PER CORP 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 SOUTHERN i.e., SOUTHERN and Coca Cola go up and down completely randomly.
Pair Corralation between SOUTHERN and Coca Cola
Assuming the 90 days trading horizon SOUTHERN PER CORP is expected to generate 0.19 times more return on investment than Coca Cola. However, SOUTHERN PER CORP is 5.34 times less risky than Coca Cola. It trades about -0.06 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 9,947 in SOUTHERN PER CORP on August 28, 2024 and sell it today you would lose (22.00) from holding SOUTHERN PER CORP or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SOUTHERN PER CORP vs. The Coca Cola
Performance |
| Timeline |
| SOUTHERN PER P |
| Coca Cola |
SOUTHERN and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOUTHERN and Coca Cola
The main advantage of trading using opposite SOUTHERN and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHERN 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.| SOUTHERN vs. The Coca Cola | SOUTHERN vs. JPMorgan Chase Co | SOUTHERN vs. Dupont De Nemours | SOUTHERN 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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