Correlation Between Coca Cola and Future Fintech
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Future Fintech 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 Future Fintech 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 Future Fintech Group, you can compare the effects of market volatilities on Coca Cola and Future Fintech 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 Future Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Future Fintech.
Diversification Opportunities for Coca Cola and Future Fintech
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Coca and Future is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Future Fintech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Fintech Group 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 Future Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Fintech Group has no effect on the direction of Coca Cola i.e., Coca Cola and Future Fintech go up and down completely randomly.
Pair Corralation between Coca Cola and Future Fintech
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 1.64 times less return on investment than Future Fintech. But when comparing it to its historical volatility, The Coca Cola is 7.22 times less risky than Future Fintech. It trades about 0.07 of its potential returns per unit of risk. Future Fintech Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 87.00 in Future Fintech Group on January 25, 2024 and sell it today you would lose (3.00) from holding Future Fintech Group or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Future Fintech Group
Performance |
| Timeline |
| Coca Cola |
| Future Fintech Group |
Coca Cola and Future Fintech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Future Fintech
The main advantage of trading using opposite Coca Cola and Future Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Future Fintech 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 Future Fintech will offset losses from the drop in Future Fintech'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 |
| Future Fintech vs. DatChat | Future Fintech vs. MMTEC Inc | Future Fintech vs. Creative Realities | Future Fintech vs. Marin Software |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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