Correlation Between Coca-Cola FEMSA and LASSONDE INDUSTINC
Can any of the company-specific risk be diversified away by investing in both Coca-Cola FEMSA 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 FEMSA 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 FEMSA SAB and LASSONDE INDUSTINC A, you can compare the effects of market volatilities on Coca-Cola FEMSA 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 FEMSA with a short position of LASSONDE INDUSTINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca-Cola FEMSA and LASSONDE INDUSTINC.
Diversification Opportunities for Coca-Cola FEMSA and LASSONDE INDUSTINC
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca-Cola and LASSONDE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola FEMSA SAB 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 FEMSA 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 FEMSA SAB 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 FEMSA i.e., Coca-Cola FEMSA and LASSONDE INDUSTINC go up and down completely randomly.
Pair Corralation between Coca-Cola FEMSA and LASSONDE INDUSTINC
Assuming the 90 days trading horizon Coca Cola FEMSA SAB is expected to generate 2.09 times more return on investment than LASSONDE INDUSTINC. However, Coca-Cola FEMSA is 2.09 times more volatile than LASSONDE INDUSTINC A. It trades about 0.04 of its potential returns per unit of risk. LASSONDE INDUSTINC A is currently generating about -0.29 per unit of risk. If you would invest 750.00 in Coca Cola FEMSA SAB on September 10, 2024 and sell it today you would earn a total of 10.00 from holding Coca Cola FEMSA SAB or generate 1.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Coca Cola FEMSA SAB vs. LASSONDE INDUSTINC A
Performance |
Timeline |
Coca Cola FEMSA |
LASSONDE INDUSTINC |
Coca-Cola FEMSA and LASSONDE INDUSTINC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca-Cola FEMSA and LASSONDE INDUSTINC
The main advantage of trading using opposite Coca-Cola FEMSA and LASSONDE INDUSTINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca-Cola FEMSA 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 FEMSA vs. SALESFORCE INC CDR | Coca-Cola FEMSA vs. QURATE RETAIL INC | Coca-Cola FEMSA vs. RYU Apparel | Coca-Cola FEMSA vs. American Eagle Outfitters |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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