Correlation Between Coca Cola and CAPITAL
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By analyzing existing cross correlation between The Coca Cola and CAPITAL ONE FINL, you can compare the effects of market volatilities on Coca Cola and CAPITAL 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 CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and CAPITAL.
Diversification Opportunities for Coca Cola and CAPITAL
Very weak diversification
The 3 months correlation between Coca and CAPITAL is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and CAPITAL ONE FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAPITAL ONE FINL 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 CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAPITAL ONE FINL has no effect on the direction of Coca Cola i.e., Coca Cola and CAPITAL go up and down completely randomly.
Pair Corralation between Coca Cola and CAPITAL
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the CAPITAL. In addition to that, Coca Cola is 5.84 times more volatile than CAPITAL ONE FINL. It trades about -0.2 of its total potential returns per unit of risk. CAPITAL ONE FINL is currently generating about -0.11 per unit of volatility. If you would invest 9,953 in CAPITAL ONE FINL on September 12, 2024 and sell it today you would lose (99.00) from holding CAPITAL ONE FINL or give up 0.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.41% |
Values | Daily Returns |
The Coca Cola vs. CAPITAL ONE FINL
Performance |
Timeline |
Coca Cola |
CAPITAL ONE FINL |
Coca Cola and CAPITAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and CAPITAL
The main advantage of trading using opposite Coca Cola and CAPITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, CAPITAL 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 CAPITAL will offset losses from the drop in CAPITAL's long position.Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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