Correlation Between Coca Cola and Hawaiian Holdings
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Hawaiian Holdings 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 Hawaiian Holdings 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 Hawaiian Holdings, you can compare the effects of market volatilities on Coca Cola and Hawaiian Holdings 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 Hawaiian Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Hawaiian Holdings.
Diversification Opportunities for Coca Cola and Hawaiian Holdings
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coca and Hawaiian is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Hawaiian Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Holdings 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 Hawaiian Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Holdings has no effect on the direction of Coca Cola i.e., Coca Cola and Hawaiian Holdings go up and down completely randomly.
Pair Corralation between Coca Cola and Hawaiian Holdings
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 23.47 times less return on investment than Hawaiian Holdings. But when comparing it to its historical volatility, The Coca Cola is 12.53 times less risky than Hawaiian Holdings. It trades about 0.01 of its potential returns per unit of risk. Hawaiian Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,406 in Hawaiian Holdings on January 19, 2024 and sell it today you would lose (71.00) from holding Hawaiian Holdings or give up 5.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
The Coca Cola vs. Hawaiian Holdings
Performance |
| Timeline |
| Coca Cola |
| Hawaiian Holdings |
Coca Cola and Hawaiian Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Hawaiian Holdings
The main advantage of trading using opposite Coca Cola and Hawaiian Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Hawaiian Holdings 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 Hawaiian Holdings will offset losses from the drop in Hawaiian Holdings' long position.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
| Hawaiian Holdings vs. Southwest Airlines | Hawaiian Holdings vs. JetBlue Airways Corp | Hawaiian Holdings vs. United Airlines Holdings | Hawaiian Holdings vs. Delta Air Lines |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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