Correlation Between METTLER TOLEDO and Coca Cola

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Can any of the company-specific risk be diversified away by investing in both METTLER TOLEDO and Coca Cola 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 METTLER TOLEDO and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METTLER TOLEDO INTL and The Coca Cola, you can compare the effects of market volatilities on METTLER TOLEDO and Coca Cola 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 METTLER TOLEDO with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of METTLER TOLEDO and Coca Cola.

Diversification Opportunities for METTLER TOLEDO and Coca Cola

0.72
  Correlation Coefficient

Poor diversification

The 3 months correlation between METTLER and Coca is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding METTLER TOLEDO INTL and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and METTLER TOLEDO 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 METTLER TOLEDO INTL are associated (or correlated) with Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of METTLER TOLEDO i.e., METTLER TOLEDO and Coca Cola go up and down completely randomly.

Pair Corralation between METTLER TOLEDO and Coca Cola

If you would invest  0.00  in METTLER TOLEDO INTL on October 5, 2024 and sell it today you would earn a total of  0.00  from holding METTLER TOLEDO INTL or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy1.69%
ValuesDaily Returns

METTLER TOLEDO INTL  vs.  The Coca Cola

 Performance 
       Timeline  
METTLER TOLEDO INTL 

Risk-Adjusted Performance

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Strong
Very Weak
Over the last 90 days METTLER TOLEDO INTL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, METTLER TOLEDO is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Coca Cola 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 rather sound basic indicators, Coca Cola is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

METTLER TOLEDO and Coca Cola Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with METTLER TOLEDO and Coca Cola

The main advantage of trading using opposite METTLER TOLEDO and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METTLER TOLEDO position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.
The idea behind METTLER TOLEDO INTL and The Coca Cola 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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