Correlation Between Identiv and Coca Cola

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

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

Diversification Opportunities for Identiv and Coca Cola

-0.47

Correlation Coefficient

Identiv  Coca Cola

Very good diversification

The 3 months correlation between Identiv and Coca is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Coca Cola FEMSA SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola FEMSA and Identiv 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 Identiv 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 FEMSA has no effect on the direction of Identiv i.e., Identiv and Coca Cola go up and down completely randomly.

Pair Corralation between Identiv and Coca Cola

Assuming the 90 days trading horizon Identiv is expected to under-perform the Coca Cola. But the stock apears to be less risky and, when comparing its historical volatility, Identiv is 1.0 times less risky than Coca Cola. The stock trades about -0.05 of its potential returns per unit of risk. The Coca Cola FEMSA SAB is currently generating about 0.05 of returns per unit of risk over similar time horizon. 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

Identiv  vs.  Coca Cola FEMSA SAB

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.

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.

Pair Trading with Identiv and Coca Cola

The main advantage of trading using opposite Identiv and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv 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 Identiv and Coca Cola FEMSA SAB 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.