Correlation Between Coca Cola and Oaktree (lux)

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

Diversification Opportunities for Coca Cola and Oaktree (lux)

0.85

Correlation Coefficient

Coca Cola  Oaktree (lux)

Very poor diversification

The 3 months correlation between Coca and Oaktree is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Oaktree Iii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree (lux) 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 Oaktree (lux). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree (lux) has no effect on the direction of Coca Cola i.e., Coca Cola and Oaktree (lux) go up and down completely randomly.

Pair Corralation between Coca Cola and Oaktree (lux)

Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 14.13 times more return on investment than Oaktree (lux). However, Coca Cola is 14.13 times more volatile than Oaktree Iii . It trades about 0.14 of its potential returns per unit of risk. Oaktree Iii is currently generating about 0.27 per unit of risk. If you would invest  6,192  in The Coca Cola on December 22, 2024 and sell it today you would earn a total of  675.00  from holding The Coca Cola or generate 10.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.33%
Values	Daily Returns

The Coca Cola  vs.  Oaktree Iii

Coca Cola

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Coca Cola are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Coca Cola may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Oaktree (lux)

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oaktree Iii are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Oaktree (lux) is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Coca Cola and Oaktree (lux)

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

The idea behind The Coca Cola and Oaktree Iii 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.