Correlation Between Coca Cola and Workday
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Workday 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 Workday 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 Workday, you can compare the effects of market volatilities on Coca Cola and Workday 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 Workday. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Workday.
Diversification Opportunities for Coca Cola and Workday
Average diversification
The 3 months correlation between Coca and Workday is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Workday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workday 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 Workday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workday has no effect on the direction of Coca Cola i.e., Coca Cola and Workday go up and down completely randomly.
Pair Corralation between Coca Cola and Workday
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 10.48 times less return on investment than Workday. But when comparing it to its historical volatility, The Coca Cola is 2.48 times less risky than Workday. It trades about 0.01 of its potential returns per unit of risk. Workday is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 20,841 in Workday on January 20, 2024 and sell it today you would earn a total of 4,381 from holding Workday or generate 21.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Workday
Performance |
| Timeline |
| Coca Cola |
| Workday |
Coca Cola and Workday Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Workday
The main advantage of trading using opposite Coca Cola and Workday positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Workday 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 Workday will offset losses from the drop in Workday'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 |
| Workday vs. Intuit Inc | Workday vs. Zoom Video Communications | Workday vs. ServiceNow | Workday vs. Snowflake |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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