Correlation Between Coca Cola and Pingtan Marine

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

By analyzing existing cross correlation between The Coca Cola and Pingtan Marine Enterprise, you can compare the effects of market volatilities on Coca Cola and Pingtan Marine 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 Pingtan Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Pingtan Marine.

Diversification Opportunities for Coca Cola and Pingtan Marine

0.64

Correlation Coefficient

Coca Cola  Pingtan Marine

Poor diversification

The 3 months correlation between Coca and Pingtan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Pingtan Marine Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pingtan Marine Enterprise 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 The Coca Cola are associated (or correlated) with Pingtan Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pingtan Marine Enterprise has no effect on the direction of Coca Cola i.e., Coca Cola and Pingtan Marine go up and down completely randomly.

Pair Corralation between Coca Cola and Pingtan Marine

If you would invest  6,173  in The Coca Cola on September 15, 2024 and sell it today you would earn a total of  139.00  from holding The Coca Cola or generate 2.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.79%
Values	Daily Returns

The Coca Cola  vs.  Pingtan Marine Enterprise

Coca Cola

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pingtan Marine Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pingtan Marine Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Pingtan Marine is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Coca Cola and Pingtan Marine

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

The idea behind The Coca Cola and Pingtan Marine Enterprise 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.