Correlation Between Coca Cola and Thessaloniki Port

Can any of the company-specific risk be diversified away by investing in both Coca Cola and Thessaloniki Port 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 Thessaloniki Port into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coca Cola HBC AG and Thessaloniki Port Authority, you can compare the effects of market volatilities on Coca Cola and Thessaloniki Port 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 Thessaloniki Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Thessaloniki Port.

Diversification Opportunities for Coca Cola and Thessaloniki Port

0.31

Correlation Coefficient

Coca Cola  Thessaloniki Port

Weak diversification

The 3 months correlation between Coca and Thessaloniki is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola HBC AG and Thessaloniki Port Authority in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thessaloniki Port 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 HBC AG are associated (or correlated) with Thessaloniki Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thessaloniki Port has no effect on the direction of Coca Cola i.e., Coca Cola and Thessaloniki Port go up and down completely randomly.

Pair Corralation between Coca Cola and Thessaloniki Port

Assuming the 90 days trading horizon Coca Cola HBC AG is expected to generate 0.99 times more return on investment than Thessaloniki Port. However, Coca Cola HBC AG is 1.01 times less risky than Thessaloniki Port. It trades about 0.05 of its potential returns per unit of risk. Thessaloniki Port Authority is currently generating about 0.02 per unit of risk. If you would invest  3,182  in Coca Cola HBC AG on September 14, 2024 and sell it today you would earn a total of  208.00  from holding Coca Cola HBC AG or generate 6.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Coca Cola HBC AG  vs.  Thessaloniki Port Authority

Coca Cola HBC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coca Cola HBC AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Coca Cola is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Thessaloniki Port

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thessaloniki Port Authority are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Thessaloniki Port may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Coca Cola and Thessaloniki Port

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

The idea behind Coca Cola HBC AG and Thessaloniki Port Authority 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.

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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 the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..