Correlation Between Coca-Cola HBC and Britvic PLC
Can any of the company-specific risk be diversified away by investing in both Coca-Cola HBC and Britvic PLC 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 HBC and Britvic PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola HBC AG and Britvic PLC ADR, you can compare the effects of market volatilities on Coca-Cola HBC and Britvic PLC 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 HBC with a short position of Britvic PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca-Cola HBC and Britvic PLC.
Diversification Opportunities for Coca-Cola HBC and Britvic PLC
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca-Cola and Britvic is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola HBC AG and Britvic PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Britvic PLC ADR and Coca-Cola HBC 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 HBC AG are associated (or correlated) with Britvic PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Britvic PLC ADR has no effect on the direction of Coca-Cola HBC i.e., Coca-Cola HBC and Britvic PLC go up and down completely randomly.
Pair Corralation between Coca-Cola HBC and Britvic PLC
Assuming the 90 days horizon Coca Cola HBC AG is expected to generate 1.47 times more return on investment than Britvic PLC. However, Coca-Cola HBC is 1.47 times more volatile than Britvic PLC ADR. It trades about 0.22 of its potential returns per unit of risk. Britvic PLC ADR is currently generating about 0.1 per unit of risk. If you would invest 2,827 in Coca Cola HBC AG on January 24, 2024 and sell it today you would earn a total of 207.00 from holding Coca Cola HBC AG or generate 7.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Coca Cola HBC AG vs. Britvic PLC ADR
Performance |
Timeline |
Coca Cola HBC |
Britvic PLC ADR |
Coca-Cola HBC and Britvic PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca-Cola HBC and Britvic PLC
The main advantage of trading using opposite Coca-Cola HBC and Britvic PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca-Cola HBC position performs unexpectedly, Britvic PLC 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 Britvic PLC will offset losses from the drop in Britvic PLC's long position.Coca-Cola HBC vs. Coca Cola Femsa SAB | Coca-Cola HBC vs. National Beverage Corp | Coca-Cola HBC vs. Primo Water Corp | Coca-Cola HBC vs. Keurig Dr Pepper |
Britvic PLC vs. National Beverage Corp | Britvic PLC vs. Vita Coco | Britvic PLC vs. Hill Street Beverage | Britvic PLC vs. Alkame Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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