Correlation Between Velodyne Lidar and Coca Cola

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

Diversification Opportunities for Velodyne Lidar and Coca Cola

0.46
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Velodyne and Coca Cola is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Velodyne Lidar and Coca Cola Europacific Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Europacific and Velodyne Lidar 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 Velodyne Lidar 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 Europacific has no effect on the direction of Velodyne Lidar i.e., Velodyne Lidar and Coca Cola go up and down completely randomly.

Pair Corralation between Velodyne Lidar and Coca Cola

Given the investment horizon of 90 days Velodyne Lidar is expected to under-perform the Coca Cola. In addition to that, Velodyne Lidar is 2.1 times more volatile than Coca Cola Europacific. It trades about -0.04 of its total potential returns per unit of risk. Coca Cola Europacific is currently generating about -0.02 per unit of volatility. If you would invest  4,651  in Coca Cola Europacific on July 6, 2022 and sell it today you would lose (55.00)  from holding Coca Cola Europacific or give up 1.18% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Velodyne Lidar  vs.  Coca Cola Europacific Partners

 Performance (%) 
       Timeline  
Velodyne Lidar 
Velodyne Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Velodyne Lidar are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting fundamental indicators, Velodyne Lidar reported solid returns over the last few months and may actually be approaching a breakup point.

Velodyne Price Channel

Coca Cola Europacific 
Coca Cola Performance
0 of 100
Over the last 90 days Coca Cola Europacific has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm insiders.

Coca Cola Price Channel

Velodyne Lidar and Coca Cola Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Velodyne Lidar and Coca Cola

The main advantage of trading using opposite Velodyne Lidar and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Velodyne Lidar 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.
Velodyne Lidar vs. Amazon Inc
The idea behind Velodyne Lidar and Coca Cola Europacific 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. Amazon Inc
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go