Correlation Between Healthequity and Coca Cola

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Healthequity 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 Healthequity and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthequity and Coca-Cola, you can compare the effects of market volatilities on Healthequity 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 Healthequity with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthequity and Coca Cola.

Diversification Opportunities for Healthequity and Coca Cola

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Healthequity and Coca Cola is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Healthequity and Coca-Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca-Cola and Healthequity 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 Healthequity 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 Healthequity i.e., Healthequity and Coca Cola go up and down completely randomly.

Pair Corralation between Healthequity and Coca Cola

Considering the 90-day investment horizon Healthequity is expected to generate 1.27 times less return on investment than Coca Cola. In addition to that, Healthequity is 2.59 times more volatile than Coca-Cola. It trades about 0.02 of its total potential returns per unit of risk. Coca-Cola is currently generating about 0.06 per unit of volatility. If you would invest  4,656  in Coca-Cola on May 21, 2022 and sell it today you would earn a total of  1,861  from holding Coca-Cola or generate 39.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Healthequity  vs.  Coca-Cola

 Performance (%) 
       Timeline  
Healthequity 
Healthequity Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Healthequity are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Healthequity is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Healthequity Price Channel

Coca-Cola 
Coca Cola Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Coca-Cola are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Coca Cola is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Coca Cola Price Channel

Healthequity and Coca Cola Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Healthequity and Coca Cola

The main advantage of trading using opposite Healthequity and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthequity 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.

Healthequity

Pair trading matchups for Healthequity

The idea behind Healthequity and Coca-Cola pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

Other Complementary Tools

Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go