Correlation Between Coca Cola and Identiv

Can any of the company-specific risk be diversified away by investing in both Coca Cola and Identiv 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 Identiv 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 Identiv, you can compare the effects of market volatilities on Coca Cola and Identiv 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 Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Identiv.

Diversification Opportunities for Coca Cola and Identiv

-0.47

Correlation Coefficient

Coca Cola  Identiv

Very good diversification

The 3 months correlation between Coca and Identiv is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola FEMSA SAB and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 FEMSA SAB are associated (or correlated) with Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of Coca Cola i.e., Coca Cola and Identiv go up and down completely randomly.

Pair Corralation between Coca Cola and Identiv

Assuming the 90 days trading horizon Coca Cola FEMSA SAB is expected to generate 1.0 times more return on investment than Identiv. However, Coca Cola is 1.0 times more volatile than Identiv. It trades about 0.05 of its potential returns per unit of risk. Identiv is currently generating about -0.05 per unit of risk. If you would invest  770.00  in Coca Cola FEMSA SAB on December 30, 2024 and sell it today you would earn a total of  55.00  from holding Coca Cola FEMSA SAB or generate 7.14% return on investment over 90 days.

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

Coca Cola FEMSA SAB  vs.  Identiv

Coca Cola FEMSA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola FEMSA SAB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Coca Cola may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Identiv

Risk-Adjusted Performance

Very Weak

Over the last 90 days Identiv has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Coca Cola and Identiv

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

The idea behind Coca Cola FEMSA SAB and Identiv 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.