Correlation Between Yakult Honsha and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Yakult Honsha 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 Yakult Honsha and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yakult Honsha CoLtd and Coca Cola FEMSA SAB, you can compare the effects of market volatilities on Yakult Honsha 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 Yakult Honsha with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yakult Honsha and Coca Cola.
Diversification Opportunities for Yakult Honsha and Coca Cola
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yakult and Coca is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Yakult Honsha CoLtd 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 Yakult Honsha 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 Yakult Honsha CoLtd 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 Yakult Honsha i.e., Yakult Honsha and Coca Cola go up and down completely randomly.
Pair Corralation between Yakult Honsha and Coca Cola
Assuming the 90 days horizon Yakult Honsha CoLtd is expected to under-perform the Coca Cola. But the stock apears to be less risky and, when comparing its historical volatility, Yakult Honsha CoLtd is 1.27 times less risky than Coca Cola. The stock trades about -0.09 of its potential returns per unit of risk. The Coca Cola FEMSA SAB is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 775.00 in Coca Cola FEMSA SAB on August 31, 2024 and sell it today you would lose (35.00) from holding Coca Cola FEMSA SAB or give up 4.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Yakult Honsha CoLtd vs. Coca Cola FEMSA SAB
Performance |
| Timeline |
| Yakult Honsha CoLtd |
| Coca Cola FEMSA |
Yakult Honsha and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yakult Honsha and Coca Cola
The main advantage of trading using opposite Yakult Honsha and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yakult Honsha 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.| Yakult Honsha vs. CDL INVESTMENT | Yakult Honsha vs. PennyMac Mortgage Investment | Yakult Honsha vs. NISSIN FOODS HLDGS | Yakult Honsha vs. Astral Foods Limited |
| Coca Cola vs. Yakult Honsha CoLtd | Coca Cola vs. Coca Cola HBC | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Britvic plc |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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