Correlation Between Coca Cola and Bank First

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

Diversification Opportunities for Coca Cola and Bank First

0.23
  Correlation Coefficient

Modest diversification

The 3 months correlation between Coca Cola and Bank First is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Coca-Cola and Bank First National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank First National 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 Coca-Cola are associated (or correlated) with Bank First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank First National has no effect on the direction of Coca Cola i.e., Coca Cola and Bank First go up and down completely randomly.

Pair Corralation between Coca Cola and Bank First

Allowing for the 90-day total investment horizon Coca-Cola is expected to generate 0.78 times more return on investment than Bank First. However, Coca-Cola is 1.28 times less risky than Bank First. It trades about 0.07 of its potential returns per unit of risk. Bank First National is currently generating about 0.04 per unit of risk. If you would invest  4,504  in Coca-Cola on May 17, 2022 and sell it today you would earn a total of  1,859  from holding Coca-Cola or generate 41.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Coca-Cola  vs.  Bank First National

 Performance (%) 
       Timeline  
Coca-Cola 
Coca Cola Performance
0 of 100
Over the last 90 days Coca-Cola has generated negative risk-adjusted returns adding no value to investors with long positions. 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

Bank First National 
Bank First Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bank First National are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Bank First may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Bank First Price Channel

Coca Cola and Bank First Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coca Cola and Bank First

The main advantage of trading using opposite Coca Cola and Bank First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Bank First 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 Bank First will offset losses from the drop in Bank First's long position.
The idea behind Coca-Cola and Bank First National 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

Other Complementary Tools

Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go