Correlation Between SPDR MSCI and Coca Cola
Can any of the company-specific risk be diversified away by investing in both SPDR MSCI 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 SPDR MSCI and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI World and Coca Cola Europacific Partners, you can compare the effects of market volatilities on SPDR MSCI 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 SPDR MSCI with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and Coca Cola.
Diversification Opportunities for SPDR MSCI and Coca Cola
Significant diversification
The 3 months correlation between SPDR and Coca is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI World and Coca Cola Europacific Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Europacific and SPDR MSCI 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 SPDR MSCI World 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 Europacific has no effect on the direction of SPDR MSCI i.e., SPDR MSCI and Coca Cola go up and down completely randomly.
Pair Corralation between SPDR MSCI and Coca Cola
Assuming the 90 days trading horizon SPDR MSCI World is expected to generate 1.36 times more return on investment than Coca Cola. However, SPDR MSCI is 1.36 times more volatile than Coca Cola Europacific Partners. It trades about 0.08 of its potential returns per unit of risk. Coca Cola Europacific Partners is currently generating about 0.08 per unit of risk. If you would invest 14,614 in SPDR MSCI World on August 24, 2024 and sell it today you would earn a total of 2,246 from holding SPDR MSCI World or generate 15.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR MSCI World vs. Coca Cola Europacific Partners
Performance |
| Timeline |
| SPDR MSCI World |
| Coca Cola Europacific |
SPDR MSCI and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MSCI and Coca Cola
The main advantage of trading using opposite SPDR MSCI and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI 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.| SPDR MSCI vs. SPDR Dow Jones | SPDR MSCI vs. iShares Core MSCI | SPDR MSCI vs. iShares SP 500 | SPDR MSCI vs. iShares Global Aggregate |
| Coca Cola vs. Heineken Holding NV | Coca Cola vs. IMCD NV | Coca Cola vs. Wolters Kluwer NV | Coca Cola vs. Koninklijke Vopak NV |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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