Correlation Between Coca Cola and GreenSky

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

Diversification Opportunities for Coca Cola and GreenSky

-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Coca Cola and GreenSky is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Coca-Cola and GreenSky Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on GreenSky 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 GreenSky. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenSky has no effect on the direction of Coca Cola i.e., Coca Cola and GreenSky go up and down completely randomly.

Pair Corralation between Coca Cola and GreenSky

If you would invest  1,020  in GreenSky on February 18, 2022 and sell it today you would earn a total of  0.00  from holding GreenSky or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy4.35%
ValuesDaily Returns

Coca-Cola  vs.  GreenSky Inc

 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

GreenSky 
GreenSky Performance
0 of 100
Over the last 90 days GreenSky has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, GreenSky is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Coca Cola and GreenSky Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Coca Cola and GreenSky

The main advantage of trading using opposite Coca Cola and GreenSky positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, GreenSky 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 GreenSky will offset losses from the drop in GreenSky's long position.
The idea behind Coca-Cola and GreenSky 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.

GreenSky

Pair trading matchups for GreenSky

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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