Correlation Between Coca Cola and Retail Holdings
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Retail Holdings 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 Retail Holdings 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 Retail Holdings NV, you can compare the effects of market volatilities on Coca Cola and Retail Holdings 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 Retail Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Retail Holdings.
Diversification Opportunities for Coca Cola and Retail Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Retail is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Retail Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Holdings NV 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 Retail Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Holdings NV has no effect on the direction of Coca Cola i.e., Coca Cola and Retail Holdings go up and down completely randomly.
Pair Corralation between Coca Cola and Retail Holdings
If you would invest 5,624 in The Coca Cola on December 2, 2024 and sell it today you would earn a total of 1,497 from holding The Coca Cola or generate 26.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
The Coca Cola vs. Retail Holdings NV
Performance |
Timeline |
Coca Cola |
Retail Holdings NV |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Coca Cola and Retail Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and Retail Holdings
The main advantage of trading using opposite Coca Cola and Retail Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Retail Holdings 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 Retail Holdings will offset losses from the drop in Retail Holdings' long position.Coca Cola vs. Vita Coco | Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. PepsiCo | Coca Cola vs. Coca Cola Femsa SAB |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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