Correlation Between Coca Cola and BriQ Properties

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

Diversification Opportunities for Coca Cola and BriQ Properties

0.51

Correlation Coefficient

Coca Cola  BriQ Properties

Very weak diversification

The 3 months correlation between Coca and BriQ is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola HBC AG and BriQ Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BriQ Properties Real 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 BriQ Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BriQ Properties Real has no effect on the direction of Coca Cola i.e., Coca Cola and BriQ Properties go up and down completely randomly.

Pair Corralation between Coca Cola and BriQ Properties

Assuming the 90 days trading horizon Coca Cola is expected to generate 16.34 times less return on investment than BriQ Properties. In addition to that, Coca Cola is 1.41 times more volatile than BriQ Properties Real. It trades about 0.01 of its total potential returns per unit of risk. BriQ Properties Real is currently generating about 0.12 per unit of volatility. If you would invest  198.00  in BriQ Properties Real on September 12, 2024 and sell it today you would earn a total of  12.00  from holding BriQ Properties Real or generate 6.06% return on investment over 90 days.

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

Coca Cola HBC AG  vs.  BriQ Properties Real

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

BriQ Properties Real

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BriQ Properties Real are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BriQ Properties is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Coca Cola and BriQ Properties

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

The idea behind Coca Cola HBC AG and BriQ Properties Real 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 Global Correlations module to find global opportunities by holding instruments from different markets.