Correlation Between PT Bank and Coca Cola

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Rakyat and Coca Cola Bottlers Japan, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Coca Cola.

Diversification Opportunities for PT Bank and Coca Cola

-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between BKRKF and Coca is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Coca Cola Bottlers Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Bottlers and PT Bank 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 PT Bank Rakyat 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 Bottlers has no effect on the direction of PT Bank i.e., PT Bank and Coca Cola go up and down completely randomly.

Pair Corralation between PT Bank and Coca Cola

Assuming the 90 days horizon PT Bank Rakyat is expected to generate 1.92 times more return on investment than Coca Cola. However, PT Bank is 1.92 times more volatile than Coca Cola Bottlers Japan. It trades about 0.02 of its potential returns per unit of risk. Coca Cola Bottlers Japan is currently generating about 0.03 per unit of risk. If you would invest  28.00  in PT Bank Rakyat on September 29, 2024 and sell it today you would lose (3.00) from holding PT Bank Rakyat or give up 10.71% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy81.69%
ValuesDaily Returns

PT Bank Rakyat  vs.  Coca Cola Bottlers Japan

 Performance 
       Timeline  
PT Bank Rakyat 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PT Bank Rakyat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, PT Bank is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
Coca Cola Bottlers 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola Bottlers Japan are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking indicators, Coca Cola may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PT Bank and Coca Cola Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PT Bank and Coca Cola

The main advantage of trading using opposite PT Bank and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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 PT Bank Rakyat and Coca Cola Bottlers Japan 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.
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

Other Complementary Tools

My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Fundamental Analysis
View fundamental data based on most recent published financial statements
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Insider Screener
Find insiders across different sectors to evaluate their impact on performance