Correlation Between Coca Cola and Coca Cola

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

Diversification Opportunities for Coca Cola and Coca Cola

-0.11
  Correlation Coefficient

Good diversification

The 3 months correlation between Coca Cola and Coca Cola is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Femsa and Coca-Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca-Cola 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 Femsa 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 Coca Cola i.e., Coca Cola and Coca Cola go up and down completely randomly.

Pair Corralation between Coca Cola and Coca Cola

Considering the 90-day investment horizon Coca Cola Femsa is expected to generate 1.28 times more return on investment than Coca Cola. However, Coca Cola is 1.28 times more volatile than Coca-Cola. It trades about 0.06 of its potential returns per unit of risk. Coca-Cola is currently generating about 0.07 per unit of risk. If you would invest  3,748  in Coca Cola Femsa on April 5, 2022 and sell it today you would earn a total of  1,890  from holding Coca Cola Femsa or generate 50.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Coca Cola Femsa  vs.  Coca-Cola

 Performance (%) 
      Timeline 
Coca Cola Femsa 
Coca Cola Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola Femsa are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Coca Cola is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0463
Payout Ratio
0.72
Last Split Factor
3:1
Forward Annual Dividend Rate
2.56
Dividend Date
2022-05-13
Ex Dividend Date
2022-04-29
Last Split Date
1998-01-28

Coca Cola Price Channel

Coca-Cola 
Coca Cola Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Coca-Cola are ranked lower than 3 (%) 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 recent stock price mess, may contribute to short-term losses for the institutional investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0273
Payout Ratio
0.71
Last Split Factor
2:1
Forward Annual Dividend Rate
1.76
Dividend Date
2022-07-01
Ex Dividend Date
2022-06-14
Last Split Date
2012-08-13

Coca Cola Price Channel

Coca Cola and Coca Cola Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Coca Cola and Coca Cola

The main advantage of trading using opposite Coca Cola and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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.
The idea behind Coca Cola Femsa 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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

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