Correlation Between Coca Cola and Kurv Yield

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

Diversification Opportunities for Coca Cola and Kurv Yield

-0.84

Correlation Coefficient

Coca Cola  Kurv Yield

Pay attention - limited upside

The 3 months correlation between Coca and Kurv is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Kurv Yield Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kurv Yield Premium 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 Kurv Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kurv Yield Premium has no effect on the direction of Coca Cola i.e., Coca Cola and Kurv Yield go up and down completely randomly.

Pair Corralation between Coca Cola and Kurv Yield

Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Kurv Yield. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 4.13 times less risky than Kurv Yield. The stock trades about -0.21 of its potential returns per unit of risk. The Kurv Yield Premium is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,093  in Kurv Yield Premium on September 4, 2024 and sell it today you would earn a total of  746.00  from holding Kurv Yield Premium or generate 35.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

The Coca Cola  vs.  Kurv Yield Premium

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.

Kurv Yield Premium

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kurv Yield Premium are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady essential indicators, Kurv Yield reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coca Cola and Kurv Yield

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

The idea behind The Coca Cola and Kurv Yield Premium 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.