Correlation Between Castellana Properties and Coca Cola

Can any of the company-specific risk be diversified away by investing in both Castellana Properties 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 Castellana Properties and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Castellana Properties Socimi and Coca Cola European Partners, you can compare the effects of market volatilities on Castellana Properties 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 Castellana Properties with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castellana Properties and Coca Cola.

Diversification Opportunities for Castellana Properties and Coca Cola

0.7

Correlation Coefficient

Castellana Properties  Coca Cola

Poor diversification

The 3 months correlation between Castellana and Coca is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Castellana Properties Socimi and Coca Cola European Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola European and Castellana Properties 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 Castellana Properties Socimi 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 European has no effect on the direction of Castellana Properties i.e., Castellana Properties and Coca Cola go up and down completely randomly.

Pair Corralation between Castellana Properties and Coca Cola

Assuming the 90 days trading horizon Castellana Properties Socimi is expected to generate 0.27 times more return on investment than Coca Cola. However, Castellana Properties Socimi is 3.67 times less risky than Coca Cola. It trades about 0.26 of its potential returns per unit of risk. Coca Cola European Partners is currently generating about 0.07 per unit of risk. If you would invest  655.00  in Castellana Properties Socimi on September 14, 2024 and sell it today you would earn a total of  40.00  from holding Castellana Properties Socimi or generate 6.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Castellana Properties Socimi  vs.  Coca Cola European Partners

Castellana Properties

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Castellana Properties Socimi are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Castellana Properties is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Coca Cola European

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola European Partners are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Coca Cola is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Castellana Properties and Coca Cola

The main advantage of trading using opposite Castellana Properties and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castellana Properties 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 Castellana Properties Socimi and Coca Cola European Partners 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.