Correlation Between Goldman Sachs and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Income and The Coca Cola, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Coca Cola.
Diversification Opportunities for Goldman Sachs and Coca Cola
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goldman and Coca is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Income and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and Goldman Sachs 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 Goldman Sachs Income 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 Goldman Sachs i.e., Goldman Sachs and Coca Cola go up and down completely randomly.
Pair Corralation between Goldman Sachs and Coca Cola
Assuming the 90 days horizon Goldman Sachs Income is expected to under-perform the Coca Cola. But the mutual fund apears to be less risky and, when comparing its historical volatility, Goldman Sachs Income is 2.0 times less risky than Coca Cola. The mutual fund trades about -0.12 of its potential returns per unit of risk. The The Coca Cola is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,054 in The Coca Cola on January 26, 2024 and sell it today you would earn a total of 101.00 from holding The Coca Cola or generate 1.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Goldman Sachs Income vs. The Coca Cola
Performance |
Timeline |
Goldman Sachs Me |
Coca Cola |
Goldman Sachs and Coca Cola Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Goldman Sachs and Coca Cola
The main advantage of trading using opposite Goldman Sachs and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.Goldman Sachs vs. Mid Cap Growth | Goldman Sachs vs. Auer Growth Fund | Goldman Sachs vs. Pnc International Growth | Goldman Sachs vs. Qs Growth Fund |
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.
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