Coca Cola Stock Volatility

KO
 Stock
  

USD 63.47  0.88  1.37%   

We consider Coca Cola very steady. Coca-Cola secures Sharpe Ratio (or Efficiency) of 0.047, which signifies that the company had 0.047% of return per unit of standard deviation over the last 3 months. Our philosophy in foreseeing the volatility of a stock is to use all available market data together with stock-specific technical indicators that cannot be diversified away. We have found twenty-one technical indicators for Coca-Cola Co, which you can use to evaluate the future volatility of the firm. Please confirm Coca-Cola mean deviation of 0.9757, and Risk Adjusted Performance of 0.0744 to double-check if the risk estimate we provide is consistent with the expected return of 0.0602%.
  
Coca Cola Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Coca Cola daily returns, and it is calculated using variance and standard deviation. We also use Coca Cola's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Coca Cola volatility.

720 Days Market Risk

Very steady

Chance of Distress

720 Days Economic Sensitivity

Follows the market closely

ESG Sustainability

While most ESG disclosures are voluntary, Coca Cola's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Coca Cola's managers and investors.
Environment Score
Governance Score
Social Score
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Coca Cola can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Coca Cola at lower prices. For example, an investor can purchase Coca Cola stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Coca Cola's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.

Moving together with Coca Cola

+0.74BGBunge LimitedPairCorr
+0.89BTIBritish American Tobacco Earnings Call This WeekPairCorr
+0.86BUDAnheuser Busch InbevPairCorr

Moving against Coca Cola

-0.64FTFTFuture Fintech GroupPairCorr

Coca Cola Market Sensitivity And Downside Risk

Coca Cola's beta coefficient measures the volatility of Coca Cola stock compared to the systematic risk of the entire stock market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Coca Cola stock's returns against your selected market. In other words, Coca Cola's beta of 0.66 provides an investor with an approximation of how much risk Coca Cola stock can potentially add to one of your existing portfolios.
Coca-Cola Co has relatively low volatility with skewness of 0.16 and kurtosis of 0.44. However, we advise all investors to independently investigate Coca-Cola Co to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Coca Cola's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Coca Cola's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
3 Months Beta |Analyze Coca-Cola Demand Trend
Check current 90 days Coca Cola correlation with market (NYSE Composite)

Coca Cola Beta

    
  0.66  
Coca Cola standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.

Standard Deviation

    
  1.28  
It is essential to understand the difference between upside risk (as represented by Coca Cola's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Coca Cola's daily returns or price. Since the actual investment returns on holding a position in coca cola stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Coca Cola.

Using Coca Cola Put Option to Manage Risk

Put options written on Coca Cola grant holders of the option the right to sell a specified amount of Coca Cola at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of Coca Cola Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Coca Cola's position is by buying a put option against it. The put option used this way is usually referred to as insurance. If an undesired outcome occurs and loss on holding Coca Cola will be realized, the loss incurred will be offset by the profits made with the option trade.

Coca Cola's PUT expiring on 2022-12-09

   Profit   
Share
       Coca Cola Price At Expiration  

Current Coca Cola Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2022-12-09 PUT at $56.0-0.00870.007882022-12-090.0 - 0.020.01View
Put
2022-12-09 PUT at $57.0-0.01680.0128652022-12-090.0 - 0.040.02View
Put
2022-12-09 PUT at $58.0-0.01130.011712132022-12-090.0 - 0.010.01View
Put
2022-12-09 PUT at $59.0-0.02260.0233902022-12-090.0 - 0.020.02View
Put
2022-12-09 PUT at $60.0-0.03690.046632022-12-090.01 - 0.030.03View
Put
2022-12-09 PUT at $61.0-0.05240.06833262022-12-090.03 - 0.040.05View
Put
2022-12-09 PUT at $62.0-0.13170.158415862022-12-090.07 - 0.090.09View
Put
2022-12-09 PUT at $63.0-0.3210.34324362022-12-090.22 - 0.250.22View
Put
2022-12-09 PUT at $64.0-0.70630.362312612022-12-090.64 - 0.740.7View
Put
2022-12-09 PUT at $65.0-0.9520.1111252022-12-091.47 - 1.621.67View
Put
2022-12-09 PUT at $66.0-0.77680.094822022-12-092.4 - 2.922.53View
View All Coca Cola Options

Coca-Cola Stock Volatility Analysis

Volatility refers to the frequency at which Coca Cola stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Coca Cola's price changes. Investors will then calculate the volatility of Coca Cola's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Coca Cola's volatility:

Historical Volatility

This type of stock volatility measures Coca Cola's fluctuations based on previous trends. It's commonly used to predict Coca Cola's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.

Implied Volatility

This type of volatility provides a positive outlook on future price fluctuations for Coca Cola's current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Coca Cola's to be redeemed at a future date.
Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. Coca-Cola Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
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Coca Cola Projected Return Density Against Market

Allowing for the 90-day total investment horizon Coca Cola has a beta of 0.6615 . This indicates as returns on the market go up, Coca Cola average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Coca-Cola Co will be expected to be much smaller as well.
Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Coca Cola or Beverages sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Coca Cola's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Coca Cola stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
The company has an alpha of 0.008, implying that it can generate a 0.008 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta).
   Predicted Return Density   
       Returns  
Coca Cola's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how coca cola stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives a Coca Cola Price Volatility?

Several factors can influence a Stock's stock volatility:

Industry

Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.

Political and Economic environment

When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.

The Company's Performance

Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.

Coca Cola Stock Risk Measures

Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Coca Cola or Beverages sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Coca Cola's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Coca Cola stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision. Allowing for the 90-day total investment horizon the coefficient of variation of Coca Cola is 2128.79. The daily returns are distributed with a variance of 1.64 and standard deviation of 1.28. The mean deviation of Coca-Cola Co is currently at 0.97. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 1.49
α
Alpha over NYSE Composite
0.008
β
Beta against NYSE Composite0.66
σ
Overall volatility
1.28
Ir
Information ratio -0.01

Coca Cola Stock Return Volatility

Coca Cola historical daily return volatility represents how much of Coca Cola stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company accepts 1.2813% volatility on return distribution over the 90 days horizon. By contrast, NYSE Composite accepts 1.5166% volatility on return distribution over the 90 days horizon.
 Performance (%) 
       Timeline  

About Coca Cola Volatility

Volatility is a rate at which the price of Coca Cola or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Coca Cola may increase or decrease. In other words, similar to Coca Cola's beta indicator, it measures the risk of Coca Cola and helps estimate the fluctuations that may happen in a short period of time. So if prices of Coca Cola fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.
Last ReportedProjected for 2022
Market Capitalization255.8 B249.3 B

Coca Cola Investment Opportunity

NYSE Composite has a standard deviation of returns of 1.52 and is 1.19 times more volatile than Coca-Cola Co. 11  of all equities and portfolios are less risky than Coca Cola. Compared to the overall equity markets, volatility of historical daily returns of Coca-Cola Co is lower than 11 () of all global equities and portfolios over the last 90 days. Use Coca-Cola Co to protect your portfolios against small market fluctuations. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences a somewhat bearish sentiment, but the market may correct it shortly. Check odds of Coca Cola to be traded at $61.57 in 90 days.

Poor diversification

The correlation between Coca-Cola Co and NYA is 0.77 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Coca-Cola Co and NYA in the same portfolio, assuming nothing else is changed.

Coca Cola Additional Risk Indicators

The analysis of Coca Cola's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Coca Cola's investment and either accepting that risk or mitigating it. Along with some common measures of Coca Cola stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

Coca Cola Suggested Diversification Pairs

Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Coca Cola as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Coca Cola's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Coca Cola's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Coca-Cola Co.
Please see Correlation Analysis. You can also try Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Complementary Tools for analysis

When running Coca-Cola price analysis, check to measure Coca Cola's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Coca Cola is operating at the current time. Most of Coca Cola's value examination focuses on studying past and present price action to predict the probability of Coca Cola's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Coca Cola's price. Additionally, you may evaluate how the addition of Coca Cola to your portfolios can decrease your overall portfolio volatility.
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Is Coca Cola's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Coca Cola. If investors know Coca Cola will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Coca Cola listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.14
Market Capitalization
274.5 B
Quarterly Revenue Growth YOY
0.1
Return On Assets
0.0836
Return On Equity
0.41
The market value of Coca-Cola is measured differently than its book value, which is the value of Coca Cola that is recorded on the company's balance sheet. Investors also form their own opinion of Coca Cola's value that differs from its market value or its book value, called intrinsic value, which is Coca Cola's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Coca Cola's market value can be influenced by many factors that don't directly affect Coca Cola's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Coca Cola's value and its price as these two are different measures arrived at by different means. Investors typically determine Coca Cola value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Coca Cola's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.