Correlation Between Coca Cola and Yokogawa Electric
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Yokogawa Electric 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 Yokogawa Electric 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 Yokogawa Electric Corp, you can compare the effects of market volatilities on Coca Cola and Yokogawa Electric 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 Yokogawa Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Yokogawa Electric.
Diversification Opportunities for Coca Cola and Yokogawa Electric
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Yokogawa is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Yokogawa Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yokogawa Electric 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 Yokogawa Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yokogawa Electric Corp has no effect on the direction of Coca Cola i.e., Coca Cola and Yokogawa Electric go up and down completely randomly.
Pair Corralation between Coca Cola and Yokogawa Electric
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.45 times more return on investment than Yokogawa Electric. However, The Coca Cola is 2.21 times less risky than Yokogawa Electric. It trades about 0.19 of its potential returns per unit of risk. Yokogawa Electric Corp is currently generating about -0.05 per unit of risk. If you would invest 6,158 in The Coca Cola on December 28, 2024 and sell it today you would earn a total of 916.00 from holding The Coca Cola or generate 14.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 98.33% |
Values | Daily Returns |
The Coca Cola vs. Yokogawa Electric Corp
Performance |
Timeline |
Coca Cola |
Yokogawa Electric Corp |
Coca Cola and Yokogawa Electric Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and Yokogawa Electric
The main advantage of trading using opposite Coca Cola and Yokogawa Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Yokogawa Electric 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 Yokogawa Electric will offset losses from the drop in Yokogawa Electric's long position.Coca Cola vs. Vita Coco | Coca Cola vs. PepsiCo | Coca Cola vs. Coca Cola Femsa SAB | 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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