Correlation Between Coca Cola and EMBARQ
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By analyzing existing cross correlation between The Coca Cola and EMBARQ P 7995, you can compare the effects of market volatilities on Coca Cola and EMBARQ 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 EMBARQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and EMBARQ.
Diversification Opportunities for Coca Cola and EMBARQ
Very good diversification
The 3 months correlation between Coca and EMBARQ is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and EMBARQ P 7995 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMBARQ P 7995 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 EMBARQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMBARQ P 7995 has no effect on the direction of Coca Cola i.e., Coca Cola and EMBARQ go up and down completely randomly.
Pair Corralation between Coca Cola and EMBARQ
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the EMBARQ. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 4.36 times less risky than EMBARQ. The stock trades about -0.23 of its potential returns per unit of risk. The EMBARQ P 7995 is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,500 in EMBARQ P 7995 on September 18, 2024 and sell it today you would lose (191.00) from holding EMBARQ P 7995 or give up 4.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
The Coca Cola vs. EMBARQ P 7995
Performance |
Timeline |
Coca Cola |
EMBARQ P 7995 |
Coca Cola and EMBARQ Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and EMBARQ
The main advantage of trading using opposite Coca Cola and EMBARQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, EMBARQ 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 EMBARQ will offset losses from the drop in EMBARQ's long position.Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Embotelladora Andina SA | Coca Cola vs. Coca Cola European Partners | Coca Cola vs. Coca Cola Consolidated |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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