Correlation Between Coca Cola and Nongfu Spring
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Nongfu Spring 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 Nongfu Spring into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and Nongfu Spring Co, you can compare the effects of market volatilities on Coca Cola and Nongfu Spring 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 Nongfu Spring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Nongfu Spring.
Diversification Opportunities for Coca Cola and Nongfu Spring
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca and Nongfu is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Nongfu Spring Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nongfu Spring 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 The Coca Cola are associated (or correlated) with Nongfu Spring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nongfu Spring has no effect on the direction of Coca Cola i.e., Coca Cola and Nongfu Spring go up and down completely randomly.
Pair Corralation between Coca Cola and Nongfu Spring
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 2.85 times less return on investment than Nongfu Spring. But when comparing it to its historical volatility, The Coca Cola is 1.21 times less risky than Nongfu Spring. It trades about 0.09 of its potential returns per unit of risk. Nongfu Spring Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 547.00 in Nongfu Spring Co on January 26, 2024 and sell it today you would earn a total of 27.00 from holding Nongfu Spring Co or generate 4.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
The Coca Cola vs. Nongfu Spring Co
Performance |
Timeline |
Coca Cola |
Nongfu Spring |
Coca Cola and Nongfu Spring Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and Nongfu Spring
The main advantage of trading using opposite Coca Cola and Nongfu Spring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Nongfu Spring 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 Nongfu Spring will offset losses from the drop in Nongfu Spring's long position.Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
Nongfu Spring vs. National Beverage Corp | Nongfu Spring vs. Celsius Holdings | Nongfu Spring vs. Monster Beverage Corp | Nongfu Spring vs. Coca Cola Femsa SAB |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance |