Correlation Between Coca Cola and Newage
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Newage 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 Newage 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 Newage Inc, you can compare the effects of market volatilities on Coca Cola and Newage 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 Newage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Newage.
Diversification Opportunities for Coca Cola and Newage
Very good diversification
The 3 months correlation between Coca and Newage is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Newage Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newage Inc 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 Newage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newage Inc has no effect on the direction of Coca Cola i.e., Coca Cola and Newage go up and down completely randomly.
Pair Corralation between Coca Cola and Newage
If you would invest 5,323 in The Coca Cola on January 19, 2024 and sell it today you would earn a total of 528.00 from holding The Coca Cola or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.81% |
| Values | Daily Returns |
The Coca Cola vs. Newage Inc
Performance |
| Timeline |
| Coca Cola |
| Newage Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coca Cola and Newage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Newage
The main advantage of trading using opposite Coca Cola and Newage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Newage 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 Newage will offset losses from the drop in Newage's 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 |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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