Correlation Between Coca Cola and Rocky Mountain
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Rocky Mountain 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 Rocky Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola Femsa SAB and Rocky Mountain High, you can compare the effects of market volatilities on Coca Cola and Rocky Mountain 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 Rocky Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Rocky Mountain.
Diversification Opportunities for Coca Cola and Rocky Mountain
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coca and Rocky is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Femsa SAB and Rocky Mountain High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Mountain High 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 Coca Cola Femsa SAB are associated (or correlated) with Rocky Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Mountain High has no effect on the direction of Coca Cola i.e., Coca Cola and Rocky Mountain go up and down completely randomly.
Pair Corralation between Coca Cola and Rocky Mountain
Considering the 90-day investment horizon Coca Cola Femsa SAB is expected to under-perform the Rocky Mountain. But the stock apears to be less risky and, when comparing its historical volatility, Coca Cola Femsa SAB is 21.81 times less risky than Rocky Mountain. The stock trades about -0.04 of its potential returns per unit of risk. The Rocky Mountain High is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Rocky Mountain High on September 12, 2024 and sell it today you would lose (0.11) from holding Rocky Mountain High or give up 11.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Coca Cola Femsa SAB vs. Rocky Mountain High
Performance |
Timeline |
Coca Cola Femsa |
Rocky Mountain High |
Coca Cola and Rocky Mountain Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and Rocky Mountain
The main advantage of trading using opposite Coca Cola and Rocky Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Rocky Mountain 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 Rocky Mountain will offset losses from the drop in Rocky Mountain's long position.Coca Cola vs. Fomento Economico Mexicano | Coca Cola vs. Grupo Televisa SAB | Coca Cola vs. Grupo Aeroportuario del | Coca Cola vs. Grupo Aeroportuario del |
Rocky Mountain vs. National Beverage Corp | Rocky Mountain vs. Celsius Holdings | Rocky Mountain vs. Monster Beverage Corp | Rocky Mountain vs. Coca Cola Femsa SAB |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |