Correlation Between Coca Cola and Leading Brands
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Leading Brands 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 Leading Brands 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 Leading Brands, you can compare the effects of market volatilities on Coca Cola and Leading Brands 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 Leading Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Leading Brands.
Diversification Opportunities for Coca Cola and Leading Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Leading is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Leading Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leading Brands 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 Leading Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leading Brands has no effect on the direction of Coca Cola i.e., Coca Cola and Leading Brands go up and down completely randomly.
Pair Corralation between Coca Cola and Leading Brands
If you would invest 5,715 in The Coca Cola on January 24, 2024 and sell it today you would earn a total of 340.00 from holding The Coca Cola or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
The Coca Cola vs. Leading Brands
Performance |
| Timeline |
| Coca Cola |
| Leading Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coca Cola and Leading Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Leading Brands
The main advantage of trading using opposite Coca Cola and Leading Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Leading Brands 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 Leading Brands will offset losses from the drop in Leading Brands' 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 |
| Leading Brands vs. Universal | Leading Brands vs. Iris Acquisition Corp | Leading Brands vs. Kite Realty Group | Leading Brands vs. Philip Morris International |
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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