Correlation Between Vienna Insurance and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and Coca Cola at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vienna Insurance and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vienna Insurance Group and Coca Cola FEMSA SAB, you can compare the effects of market volatilities on Vienna Insurance 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 Vienna Insurance with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Coca Cola.
Diversification Opportunities for Vienna Insurance and Coca Cola
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vienna and Coca is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Coca Cola FEMSA SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola FEMSA and Vienna Insurance 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 Vienna Insurance Group 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 FEMSA has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Coca Cola go up and down completely randomly.
Pair Corralation between Vienna Insurance and Coca Cola
Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 0.22 times more return on investment than Coca Cola. However, Vienna Insurance Group is 4.45 times less risky than Coca Cola. It trades about 0.29 of its potential returns per unit of risk. Coca Cola FEMSA SAB is currently generating about 0.04 per unit of risk. If you would invest 3,035 in Vienna Insurance Group on November 2, 2024 and sell it today you would earn a total of 165.00 from holding Vienna Insurance Group or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vienna Insurance Group vs. Coca Cola FEMSA SAB
Performance |
| Timeline |
| Vienna Insurance |
| Coca Cola FEMSA |
Vienna Insurance and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vienna Insurance and Coca Cola
The main advantage of trading using opposite Vienna Insurance and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance 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.| Vienna Insurance vs. Zurich Insurance Group | Vienna Insurance vs. American International Group | Vienna Insurance vs. Assicurazioni Generali SpA | Vienna Insurance vs. Sun Life Financial |
| Coca Cola vs. Align Technology | Coca Cola vs. Computershare Limited | Coca Cola vs. Vishay Intertechnology | Coca Cola vs. Alaska Air 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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