Correlation Between Coca Cola and British Amer
Can any of the company-specific risk be diversified away by investing in both Coca Cola and British Amer 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 British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola European Partners and British American Tobacco, you can compare the effects of market volatilities on Coca Cola and British Amer 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 British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and British Amer.
Diversification Opportunities for Coca Cola and British Amer
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coca and British is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola European Partners and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 European Partners are associated (or correlated) with British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Coca Cola i.e., Coca Cola and British Amer go up and down completely randomly.
Pair Corralation between Coca Cola and British Amer
Given the investment horizon of 90 days Coca Cola European Partners is expected to under-perform the British Amer. In addition to that, Coca Cola is 1.02 times more volatile than British American Tobacco. It trades about -0.17 of its total potential returns per unit of risk. British American Tobacco is currently generating about -0.11 per unit of volatility. If you would invest 3,005 in British American Tobacco on January 24, 2024 and sell it today you would lose (64.00) from holding British American Tobacco or give up 2.13% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Coca Cola European Partners vs. British American Tobacco
Performance |
Timeline |
Coca Cola European |
British American Tobacco |
Coca Cola and British Amer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and British Amer
The main advantage of trading using opposite Coca Cola and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, British Amer 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 British Amer will offset losses from the drop in British Amer's long position.Coca Cola vs. Vita Coco | Coca Cola vs. Primo Water Corp | Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Embotelladora Andina SA |
British Amer vs. Hempacco Co | British Amer vs. Green Globe International | British Amer vs. Imperial Brands PLC | British Amer vs. Kaival Brands Innovations |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |