Correlation Between Coca Cola and Vivic Corp

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

Diversification Opportunities for Coca Cola and Vivic Corp

0.16

Correlation Coefficient

Coca Cola  Vivic Corp

Average diversification

The 3 months correlation between Coca and Vivic is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Vivic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivic Corp 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 Vivic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivic Corp has no effect on the direction of Coca Cola i.e., Coca Cola and Vivic Corp go up and down completely randomly.

Pair Corralation between Coca Cola and Vivic Corp

Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Vivic Corp. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 17.85 times less risky than Vivic Corp. The stock trades about -0.18 of its potential returns per unit of risk. The Vivic Corp is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  219.00  in Vivic Corp on October 9, 2024 and sell it today you would earn a total of  151.00  from holding Vivic Corp or generate 68.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

The Coca Cola  vs.  Vivic Corp

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 weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Vivic Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vivic Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Vivic Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coca Cola and Vivic Corp

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

The idea behind The Coca Cola and Vivic Corp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.