Correlation Between Coca Cola and Austriacard Holdings

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

By analyzing existing cross correlation between Coca Cola HBC AG and Austriacard Holdings AG, you can compare the effects of market volatilities on Coca Cola and Austriacard Holdings 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 Austriacard Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Austriacard Holdings.

Diversification Opportunities for Coca Cola and Austriacard Holdings

-0.58

Correlation Coefficient

Coca Cola  Austriacard Holdings

Excellent diversification

The 3 months correlation between Coca and Austriacard is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola HBC AG and Austriacard Holdings AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austriacard Holdings 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 AG are associated (or correlated) with Austriacard Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austriacard Holdings has no effect on the direction of Coca Cola i.e., Coca Cola and Austriacard Holdings go up and down completely randomly.

Pair Corralation between Coca Cola and Austriacard Holdings

Assuming the 90 days trading horizon Coca Cola HBC AG is expected to generate 0.99 times more return on investment than Austriacard Holdings. However, Coca Cola HBC AG is 1.01 times less risky than Austriacard Holdings. It trades about 0.01 of its potential returns per unit of risk. Austriacard Holdings AG is currently generating about 0.0 per unit of risk. If you would invest  3,384  in Coca Cola HBC AG on September 15, 2024 and sell it today you would earn a total of  6.00  from holding Coca Cola HBC AG or generate 0.18% 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 HBC AG  vs.  Austriacard Holdings AG

Coca Cola HBC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coca Cola HBC AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Coca Cola is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Austriacard Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Austriacard Holdings AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Austriacard Holdings is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Coca Cola and Austriacard Holdings

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

The idea behind Coca Cola HBC AG and Austriacard Holdings AG 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.