Correlation Between PSQ Holdings and 191216CM0

Can any of the company-specific risk be diversified away by investing in both PSQ Holdings and 191216CM0 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 PSQ Holdings and 191216CM0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PSQ Holdings and COCA COLA CO, you can compare the effects of market volatilities on PSQ Holdings and 191216CM0 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 PSQ Holdings with a short position of 191216CM0. Check out your portfolio center. Please also check ongoing floating volatility patterns of PSQ Holdings and 191216CM0.

Diversification Opportunities for PSQ Holdings and 191216CM0

-0.29

Correlation Coefficient

PSQ Holdings  191216CM0

Very good diversification

The 3 months correlation between PSQ and 191216CM0 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding PSQ Holdings and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO and PSQ Holdings 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 PSQ Holdings are associated (or correlated) with 191216CM0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of PSQ Holdings i.e., PSQ Holdings and 191216CM0 go up and down completely randomly.

Pair Corralation between PSQ Holdings and 191216CM0

Given the investment horizon of 90 days PSQ Holdings is expected to under-perform the 191216CM0. In addition to that, PSQ Holdings is 7.2 times more volatile than COCA COLA CO. It trades about -0.22 of its total potential returns per unit of risk. COCA COLA CO is currently generating about -0.08 per unit of volatility. If you would invest  8,977  in COCA COLA CO on December 28, 2024 and sell it today you would lose (287.00) from holding COCA COLA CO or give up 3.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

PSQ Holdings  vs.  COCA COLA CO

PSQ Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days PSQ Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

COCA A CO

Risk-Adjusted Performance

Very Weak

Over the last 90 days COCA COLA CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 191216CM0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PSQ Holdings and 191216CM0

The main advantage of trading using opposite PSQ Holdings and 191216CM0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PSQ Holdings position performs unexpectedly, 191216CM0 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 191216CM0 will offset losses from the drop in 191216CM0's long position.

The idea behind PSQ Holdings and COCA COLA CO 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.