Correlation Between Coca Cola and LASSONDE INDUSTINC
Can any of the company-specific risk be diversified away by investing in both Coca Cola and LASSONDE INDUSTINC 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 Coca Cola and LASSONDE INDUSTINC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola HBC and LASSONDE INDUSTINC A, you can compare the effects of market volatilities on Coca Cola and LASSONDE INDUSTINC 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 Coca Cola with a short position of LASSONDE INDUSTINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and LASSONDE INDUSTINC.
Diversification Opportunities for Coca Cola and LASSONDE INDUSTINC
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Coca and LASSONDE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola HBC and LASSONDE INDUSTINC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LASSONDE INDUSTINC and Coca Cola 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 Coca Cola HBC are associated (or correlated) with LASSONDE INDUSTINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LASSONDE INDUSTINC has no effect on the direction of Coca Cola i.e., Coca Cola and LASSONDE INDUSTINC go up and down completely randomly.
Pair Corralation between Coca Cola and LASSONDE INDUSTINC
Assuming the 90 days horizon Coca Cola is expected to generate 6.31 times less return on investment than LASSONDE INDUSTINC. But when comparing it to its historical volatility, Coca Cola HBC is 1.61 times less risky than LASSONDE INDUSTINC. It trades about 0.01 of its potential returns per unit of risk. LASSONDE INDUSTINC A is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,103 in LASSONDE INDUSTINC A on September 10, 2024 and sell it today you would earn a total of 297.00 from holding LASSONDE INDUSTINC A or generate 2.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Coca Cola HBC vs. LASSONDE INDUSTINC A
Performance |
Timeline |
Coca Cola HBC |
LASSONDE INDUSTINC |
Coca Cola and LASSONDE INDUSTINC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and LASSONDE INDUSTINC
The main advantage of trading using opposite Coca Cola and LASSONDE INDUSTINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, LASSONDE INDUSTINC 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 LASSONDE INDUSTINC will offset losses from the drop in LASSONDE INDUSTINC's long position.Coca Cola vs. EAGLE MATERIALS | Coca Cola vs. NetSol Technologies | Coca Cola vs. Hyster Yale Materials Handling | Coca Cola vs. THORNEY TECHS LTD |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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