Correlation Between Coca Cola and Cresud Wnt
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Cresud Wnt 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 Cresud Wnt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and Cresud Wnt, you can compare the effects of market volatilities on Coca Cola and Cresud Wnt 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 Cresud Wnt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Cresud Wnt.
Diversification Opportunities for Coca Cola and Cresud Wnt
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and Cresud is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Cresud Wnt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud Wnt 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 The Coca Cola are associated (or correlated) with Cresud Wnt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud Wnt has no effect on the direction of Coca Cola i.e., Coca Cola and Cresud Wnt go up and down completely randomly.
Pair Corralation between Coca Cola and Cresud Wnt
Assuming the 90 days horizon The Coca Cola is expected to under-perform the Cresud Wnt. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 3.23 times less risky than Cresud Wnt. The stock trades about -0.08 of its potential returns per unit of risk. The Cresud Wnt is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 67,200 in Cresud Wnt on October 24, 2024 and sell it today you would earn a total of 67,800 from holding Cresud Wnt or generate 100.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
The Coca Cola vs. Cresud Wnt
Performance |
Timeline |
Coca Cola |
Cresud Wnt |
Coca Cola and Cresud Wnt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and Cresud Wnt
The main advantage of trading using opposite Coca Cola and Cresud Wnt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Cresud Wnt 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 Cresud Wnt will offset losses from the drop in Cresud Wnt's long position.Coca Cola vs. Transportadora de Gas | Coca Cola vs. Harmony Gold Mining | Coca Cola vs. United States Steel | Coca Cola vs. Agrometal SAI |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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