Correlation Between Covenant Logistics and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Covenant Logistics 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 Covenant Logistics and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Covenant Logistics Group and The Coca Cola, you can compare the effects of market volatilities on Covenant Logistics 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 Covenant Logistics with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Covenant Logistics and Coca Cola.
Diversification Opportunities for Covenant Logistics and Coca Cola
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Covenant and Coca is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Covenant Logistics Group and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and Covenant Logistics 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 Covenant Logistics Group 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 Covenant Logistics i.e., Covenant Logistics and Coca Cola go up and down completely randomly.
Pair Corralation between Covenant Logistics and Coca Cola
Given the investment horizon of 90 days Covenant Logistics Group is expected to generate 1.78 times more return on investment than Coca Cola. However, Covenant Logistics is 1.78 times more volatile than The Coca Cola. It trades about 0.01 of its potential returns per unit of risk. The Coca Cola is currently generating about -0.05 per unit of risk. If you would invest 4,463 in Covenant Logistics Group on January 20, 2024 and sell it today you would earn a total of 8.00 from holding Covenant Logistics Group or generate 0.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Covenant Logistics Group vs. The Coca Cola
Performance |
Timeline |
Covenant Logistics |
Coca Cola |
Covenant Logistics and Coca Cola Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Covenant Logistics and Coca Cola
The main advantage of trading using opposite Covenant Logistics and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Covenant Logistics 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.Covenant Logistics vs. Marten Transport | Covenant Logistics vs. Werner Enterprises | Covenant Logistics vs. Universal Logistics Holdings | Covenant Logistics vs. Schneider National |
Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |