Correlation Between Elvalhalcor Hellenic and Coca Cola

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

By analyzing existing cross correlation between Elvalhalcor Hellenic Copper and Coca Cola HBC AG, you can compare the effects of market volatilities on Elvalhalcor Hellenic and Coca Cola 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 Elvalhalcor Hellenic with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elvalhalcor Hellenic and Coca Cola.

Diversification Opportunities for Elvalhalcor Hellenic and Coca Cola

-0.02

Correlation Coefficient

Elvalhalcor Hellenic  Coca Cola

Good diversification

The 3 months correlation between Elvalhalcor and Coca is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Elvalhalcor Hellenic Copper and Coca Cola HBC AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola HBC and Elvalhalcor Hellenic 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 Elvalhalcor Hellenic Copper are associated (or correlated) with Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola HBC has no effect on the direction of Elvalhalcor Hellenic i.e., Elvalhalcor Hellenic and Coca Cola go up and down completely randomly.

Pair Corralation between Elvalhalcor Hellenic and Coca Cola

Assuming the 90 days trading horizon Elvalhalcor Hellenic Copper is expected to generate 1.65 times more return on investment than Coca Cola. However, Elvalhalcor Hellenic is 1.65 times more volatile than Coca Cola HBC AG. It trades about 0.04 of its potential returns per unit of risk. Coca Cola HBC AG is currently generating about 0.04 per unit of risk. If you would invest  186.00  in Elvalhalcor Hellenic Copper on September 4, 2024 and sell it today you would earn a total of  7.00  from holding Elvalhalcor Hellenic Copper or generate 3.76% return on investment over 90 days.

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

Elvalhalcor Hellenic Copper  vs.  Coca Cola HBC AG

Elvalhalcor Hellenic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elvalhalcor Hellenic Copper are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Elvalhalcor Hellenic is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Coca Cola HBC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola HBC AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Elvalhalcor Hellenic and Coca Cola

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

The idea behind Elvalhalcor Hellenic Copper and Coca Cola HBC 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.