Correlation Between Anadolu Efes and Coca Cola

Can any of the company-specific risk be diversified away by investing in both Anadolu Efes 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 Anadolu Efes and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anadolu Efes Biracilik and Coca Cola Icecek AS, you can compare the effects of market volatilities on Anadolu Efes 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 Anadolu Efes with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anadolu Efes and Coca Cola.

Diversification Opportunities for Anadolu Efes and Coca Cola

0.54

Correlation Coefficient

Anadolu Efes  Coca Cola

Very weak diversification

The 3 months correlation between Anadolu and Coca is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Anadolu Efes Biracilik and Coca Cola Icecek AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Icecek and Anadolu Efes 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 Anadolu Efes Biracilik 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 Icecek has no effect on the direction of Anadolu Efes i.e., Anadolu Efes and Coca Cola go up and down completely randomly.

Pair Corralation between Anadolu Efes and Coca Cola

Assuming the 90 days trading horizon Anadolu Efes Biracilik is expected to generate 1.2 times more return on investment than Coca Cola. However, Anadolu Efes is 1.2 times more volatile than Coca Cola Icecek AS. It trades about 0.07 of its potential returns per unit of risk. Coca Cola Icecek AS is currently generating about 0.07 per unit of risk. If you would invest  10,925  in Anadolu Efes Biracilik on October 11, 2024 and sell it today you would earn a total of  6,225  from holding Anadolu Efes Biracilik or generate 56.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Anadolu Efes Biracilik  vs.  Coca Cola Icecek AS

Anadolu Efes Biracilik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anadolu Efes Biracilik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Coca Cola Icecek

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola Icecek AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Coca Cola demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anadolu Efes and Coca Cola

The main advantage of trading using opposite Anadolu Efes and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anadolu Efes 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.

The idea behind Anadolu Efes Biracilik and Coca Cola Icecek AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.