Correlation Between Coca Cola and KANSAS
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By analyzing existing cross correlation between The Coca Cola and KANSAS CITY SOUTHN, you can compare the effects of market volatilities on Coca Cola and KANSAS 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 KANSAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and KANSAS.
Diversification Opportunities for Coca Cola and KANSAS
Pay attention - limited upside
The 3 months correlation between Coca and KANSAS is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and KANSAS CITY SOUTHN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KANSAS CITY SOUTHN 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 KANSAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KANSAS CITY SOUTHN has no effect on the direction of Coca Cola i.e., Coca Cola and KANSAS go up and down completely randomly.
Pair Corralation between Coca Cola and KANSAS
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the KANSAS. In addition to that, Coca Cola is 1.25 times more volatile than KANSAS CITY SOUTHN. It trades about -0.21 of its total potential returns per unit of risk. KANSAS CITY SOUTHN is currently generating about -0.16 per unit of volatility. If you would invest 9,837 in KANSAS CITY SOUTHN on September 7, 2024 and sell it today you would lose (140.00) from holding KANSAS CITY SOUTHN or give up 1.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 20.31% |
Values | Daily Returns |
The Coca Cola vs. KANSAS CITY SOUTHN
Performance |
Timeline |
Coca Cola |
KANSAS CITY SOUTHN |
Coca Cola and KANSAS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and KANSAS
The main advantage of trading using opposite Coca Cola and KANSAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, KANSAS 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 KANSAS will offset losses from the drop in KANSAS'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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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