Correlation Between Coca Cola and SUMITOMO
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By analyzing existing cross correlation between The Coca Cola and SUMITOMO MITSUI FINANCIAL, you can compare the effects of market volatilities on Coca Cola and SUMITOMO 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 SUMITOMO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and SUMITOMO.
Diversification Opportunities for Coca Cola and SUMITOMO
Good diversification
The 3 months correlation between Coca and SUMITOMO is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and SUMITOMO MITSUI FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMITOMO MITSUI FINANCIAL 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 SUMITOMO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMITOMO MITSUI FINANCIAL has no effect on the direction of Coca Cola i.e., Coca Cola and SUMITOMO go up and down completely randomly.
Pair Corralation between Coca Cola and SUMITOMO
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 1.34 times more return on investment than SUMITOMO. However, Coca Cola is 1.34 times more volatile than SUMITOMO MITSUI FINANCIAL. It trades about 0.16 of its potential returns per unit of risk. SUMITOMO MITSUI FINANCIAL is currently generating about -0.12 per unit of risk. If you would invest 6,365 in The Coca Cola on December 2, 2024 and sell it today you would earn a total of 756.00 from holding The Coca Cola or generate 11.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.72% |
Values | Daily Returns |
The Coca Cola vs. SUMITOMO MITSUI FINANCIAL
Performance |
Timeline |
Coca Cola |
SUMITOMO MITSUI FINANCIAL |
Coca Cola and SUMITOMO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and SUMITOMO
The main advantage of trading using opposite Coca Cola and SUMITOMO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, SUMITOMO 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 SUMITOMO will offset losses from the drop in SUMITOMO's long position.Coca Cola vs. Vita Coco | Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. PepsiCo | Coca Cola vs. Coca Cola Femsa SAB |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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