Correlation Between Coca Cola and Yaprak Sut

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

By analyzing existing cross correlation between Coca Cola Icecek AS and Yaprak Sut ve, you can compare the effects of market volatilities on Coca Cola and Yaprak Sut 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 Yaprak Sut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Yaprak Sut.

Diversification Opportunities for Coca Cola and Yaprak Sut

0.74

Correlation Coefficient

Coca Cola  Yaprak Sut

Poor diversification

The 3 months correlation between Coca and Yaprak is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Icecek AS and Yaprak Sut ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yaprak Sut ve 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 Icecek AS are associated (or correlated) with Yaprak Sut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yaprak Sut ve has no effect on the direction of Coca Cola i.e., Coca Cola and Yaprak Sut go up and down completely randomly.

Pair Corralation between Coca Cola and Yaprak Sut

Assuming the 90 days trading horizon Coca Cola Icecek AS is expected to generate 9.12 times more return on investment than Yaprak Sut. However, Coca Cola is 9.12 times more volatile than Yaprak Sut ve. It trades about 0.05 of its potential returns per unit of risk. Yaprak Sut ve is currently generating about 0.14 per unit of risk. If you would invest  1,623  in Coca Cola Icecek AS on October 4, 2024 and sell it today you would earn a total of  4,237  from holding Coca Cola Icecek AS or generate 261.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Coca Cola Icecek AS  vs.  Yaprak Sut ve

Coca Cola Icecek

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola Icecek AS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Coca Cola may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Yaprak Sut ve

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Yaprak Sut ve are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Yaprak Sut demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coca Cola and Yaprak Sut

The main advantage of trading using opposite Coca Cola and Yaprak Sut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Yaprak Sut 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 Yaprak Sut will offset losses from the drop in Yaprak Sut's long position.

The idea behind Coca Cola Icecek AS and Yaprak Sut ve 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 Stocks Directory module to find actively traded stocks across global markets.