Correlation Between Baldwin Lyons and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Baldwin Lyons 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 Baldwin Lyons and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baldwin Lyons and The Coca Cola, you can compare the effects of market volatilities on Baldwin Lyons 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 Baldwin Lyons with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baldwin Lyons and Coca Cola.
Diversification Opportunities for Baldwin Lyons and Coca Cola
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Baldwin and Coca is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Baldwin Lyons and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and Baldwin Lyons 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 Baldwin Lyons 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 has no effect on the direction of Baldwin Lyons i.e., Baldwin Lyons and Coca Cola go up and down completely randomly.
Pair Corralation between Baldwin Lyons and Coca Cola
If you would invest (100.00) in Baldwin Lyons on January 17, 2024 and sell it today you would earn a total of 100.00 from holding Baldwin Lyons or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Baldwin Lyons vs. The Coca Cola
Performance |
| Timeline |
| Baldwin Lyons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Coca Cola |
Baldwin Lyons and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baldwin Lyons and Coca Cola
The main advantage of trading using opposite Baldwin Lyons and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baldwin Lyons 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.| Baldwin Lyons vs. Ternium SA ADR | Baldwin Lyons vs. Nippon Steel Corp | Baldwin Lyons vs. Insteel Industries | Baldwin Lyons vs. Carters |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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