Correlation Between Coca Cola and Intel
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola Consolidated and Intel, you can compare the effects of market volatilities on Coca Cola and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Intel.
Diversification Opportunities for Coca Cola and Intel
Excellent diversification
The 3 months correlation between Coca and Intel is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Consolidated and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Coca Cola Consolidated are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Coca Cola i.e., Coca Cola and Intel go up and down completely randomly.
Pair Corralation between Coca Cola and Intel
Given the investment horizon of 90 days Coca Cola Consolidated is expected to generate 0.63 times more return on investment than Intel. However, Coca Cola Consolidated is 1.58 times less risky than Intel. It trades about 0.1 of its potential returns per unit of risk. Intel is currently generating about -0.06 per unit of risk. If you would invest 98,117 in Coca Cola Consolidated on March 20, 2024 and sell it today you would earn a total of 2,051 from holding Coca Cola Consolidated or generate 2.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Coca Cola Consolidated vs. Intel
Performance |
Timeline |
Coca Cola Consolidated |
Intel |
Coca Cola and Intel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and Intel
The main advantage of trading using opposite Coca Cola and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.Coca Cola vs. The Coca Cola | Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. PepsiCo | Coca Cola vs. Vita Coco |
Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data |