Correlation Between Coca Cola and Kendrion

Can any of the company-specific risk be diversified away by investing in both Coca Cola and Kendrion 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 Kendrion into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coca Cola Europacific Partners and Kendrion NV, you can compare the effects of market volatilities on Coca Cola and Kendrion 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 Kendrion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Kendrion.

Diversification Opportunities for Coca Cola and Kendrion

0.0

Correlation Coefficient

Coca Cola  Kendrion

Pay attention - limited upside

The 3 months correlation between Coca and Kendrion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Europacific Partners and Kendrion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kendrion NV 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 Europacific Partners are associated (or correlated) with Kendrion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kendrion NV has no effect on the direction of Coca Cola i.e., Coca Cola and Kendrion go up and down completely randomly.

Pair Corralation between Coca Cola and Kendrion

If you would invest (100.00) in Coca Cola Europacific Partners on June 23, 2024 and sell it today you would earn a total of  100.00  from holding Coca Cola Europacific Partners 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

Coca Cola Europacific Partners  vs.  Kendrion NV

Coca Cola Europacific

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coca Cola Europacific Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Coca Cola is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Kendrion NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kendrion NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Coca Cola and Kendrion

The main advantage of trading using opposite Coca Cola and Kendrion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Kendrion 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 Kendrion will offset losses from the drop in Kendrion's long position.

The idea behind Coca Cola Europacific Partners and Kendrion NV 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.