Correlation Between Coca Cola and INTNED

Can any of the company-specific risk be diversified away by investing in both Coca Cola and INTNED 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 INTNED 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 INTNED 4252 28 MAR 33, you can compare the effects of market volatilities on Coca Cola and INTNED 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 INTNED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and INTNED.

Diversification Opportunities for Coca Cola and INTNED

0.73

Correlation Coefficient

Coca Cola  INTNED

Poor diversification

The 3 months correlation between Coca and INTNED is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and INTNED 4252 28 MAR 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTNED 4252 28 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 INTNED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTNED 4252 28 has no effect on the direction of Coca Cola i.e., Coca Cola and INTNED go up and down completely randomly.

Pair Corralation between Coca Cola and INTNED

Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the INTNED. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 2.18 times less risky than INTNED. The stock trades about -0.17 of its potential returns per unit of risk. The INTNED 4252 28 MAR 33 is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  9,737  in INTNED 4252 28 MAR 33 on September 19, 2024 and sell it today you would lose (665.00) from holding INTNED 4252 28 MAR 33 or give up 6.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.48%
Values	Daily Returns

The Coca Cola  vs.  INTNED 4252 28 MAR 33

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 fragile 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.

INTNED 4252 28

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 4252 28 MAR 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for INTNED 4252 28 MAR 33 investors.

Pair Trading with Coca Cola and INTNED

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

The idea behind The Coca Cola and INTNED 4252 28 MAR 33 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.