Correlation Between Quantified Alternative and Coca Cola

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

Diversification Opportunities for Quantified Alternative and Coca Cola

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Quantified and Coca Cola is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Quantified Alternative Investm and Coca-Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca-Cola and Quantified Alternative 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 Quantified Alternative Investment 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 Quantified Alternative i.e., Quantified Alternative and Coca Cola go up and down completely randomly.

Pair Corralation between Quantified Alternative and Coca Cola

Assuming the 90 days horizon Quantified Alternative is expected to generate 44.7 times less return on investment than Coca Cola. But when comparing it to its historical volatility, Quantified Alternative Investment is 1.43 times less risky than Coca Cola. It trades about 0.0 of its potential returns per unit of risk. Coca-Cola is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,663  in Coca-Cola on June 29, 2022 and sell it today you would earn a total of  975.00  from holding Coca-Cola or generate 20.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Quantified Alternative Investm  vs.  Coca-Cola

 Performance (%) 
       Timeline  
Quantified Alternative 
Quantified Performance
0 of 100
Over the last 90 days Quantified Alternative Investment has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Quantified Alternative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Quantified Price Channel

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 latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Coca Cola Price Channel

Quantified Alternative and Coca Cola Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Quantified Alternative and Coca Cola

The main advantage of trading using opposite Quantified Alternative and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantified Alternative 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.
Quantified Alternative vs. Bank Of America
The idea behind Quantified Alternative Investment 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.
Coca Cola vs. Kibush Capital Corp
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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