Correlation Between BANK OF CHINA and Coca Cola
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By analyzing existing cross correlation between BANK OF CHINA and The Coca Cola, you can compare the effects of market volatilities on BANK OF CHINA 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 BANK OF CHINA with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK OF CHINA and Coca Cola.
Diversification Opportunities for BANK OF CHINA and Coca Cola
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between BANK and Coca is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding BANK OF CHINA and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and BANK OF CHINA 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 BANK OF CHINA 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 BANK OF CHINA i.e., BANK OF CHINA and Coca Cola go up and down completely randomly.
Pair Corralation between BANK OF CHINA and Coca Cola
Assuming the 90 days trading horizon BANK OF CHINA is expected to generate 7.96 times more return on investment than Coca Cola. However, BANK OF CHINA is 7.96 times more volatile than The Coca Cola. It trades about 0.24 of its potential returns per unit of risk. The Coca Cola is currently generating about -0.09 per unit of risk. If you would invest 35.00 in BANK OF CHINA on October 29, 2024 and sell it today you would earn a total of 13.00 from holding BANK OF CHINA or generate 37.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK OF CHINA vs. The Coca Cola
Performance |
| Timeline |
| BANK OF CHINA |
| Coca Cola |
BANK OF CHINA and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK OF CHINA and Coca Cola
The main advantage of trading using opposite BANK OF CHINA and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK OF CHINA 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.| BANK OF CHINA vs. SYSTEMAIR AB | BANK OF CHINA vs. WIMFARM SA EO | BANK OF CHINA vs. Federal Agricultural Mortgage | BANK OF CHINA vs. Australian Agricultural |
| Coca Cola vs. TYSON FOODS A | Coca Cola vs. Chiba Bank | Coca Cola vs. S E BANKEN A | Coca Cola vs. Lery Seafood 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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