Correlation Between Alico and Coca Cola

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Alico 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 Alico and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alico Inc and The Coca Cola, you can compare the effects of market volatilities on Alico 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 Alico with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alico and Coca Cola.

Diversification Opportunities for Alico and Coca Cola

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between Alico and Coca is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Alico Inc and The Coca-Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca-Cola and Alico 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 Alico Inc 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 Alico i.e., Alico and Coca Cola go up and down completely randomly.

Pair Corralation between Alico and Coca Cola

Given the investment horizon of 90 days Alico Inc is expected to generate 2.9 times more return on investment than Coca Cola. However, Alico is 2.9 times more volatile than The Coca Cola. It trades about 0.2 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.17 per unit of risk. If you would invest  2,725  in Alico Inc on December 30, 2023 and sell it today you would earn a total of  203.00  from holding Alico Inc or generate 7.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Alico Inc  vs.  The Coca-Cola

 Performance 
       Timeline  
Alico Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Weak
Over the last 90 days Alico Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Alico is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Coca-Cola 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in The Coca Cola are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Coca Cola is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Alico and Coca Cola Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alico and Coca Cola

The main advantage of trading using opposite Alico and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alico 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.
The idea behind Alico Inc and The Coca Cola pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

Other Complementary Tools

ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Global Correlations
Find global opportunities by holding instruments from different markets
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets