Correlation Between Coca Cola and GraniteShares 15x

Can any of the company-specific risk be diversified away by investing in both Coca Cola and GraniteShares 15x 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 GraniteShares 15x 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 GraniteShares 15x Long, you can compare the effects of market volatilities on Coca Cola and GraniteShares 15x 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 GraniteShares 15x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and GraniteShares 15x.

Diversification Opportunities for Coca Cola and GraniteShares 15x

-0.33

Correlation Coefficient

Coca Cola  GraniteShares 15x

Very good diversification

The 3 months correlation between Coca and GraniteShares is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and GraniteShares 15x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 15x Long 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 GraniteShares 15x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 15x Long has no effect on the direction of Coca Cola i.e., Coca Cola and GraniteShares 15x go up and down completely randomly.

Pair Corralation between Coca Cola and GraniteShares 15x

Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the GraniteShares 15x. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 3.65 times less risky than GraniteShares 15x. The stock trades about -0.23 of its potential returns per unit of risk. The GraniteShares 15x Long is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2,755  in GraniteShares 15x Long on September 13, 2024 and sell it today you would earn a total of  1,156  from holding GraniteShares 15x Long or generate 41.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

The Coca Cola  vs.  GraniteShares 15x Long

Coca Cola

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Coca Cola has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

GraniteShares 15x Long

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 15x Long are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental drivers, GraniteShares 15x disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coca Cola and GraniteShares 15x

The main advantage of trading using opposite Coca Cola and GraniteShares 15x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, GraniteShares 15x 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 GraniteShares 15x will offset losses from the drop in GraniteShares 15x's long position.

The idea behind The Coca Cola and GraniteShares 15x Long 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 Transaction History module to view history of all your transactions and understand their impact on performance.