Correlation Between Coca Cola and V

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

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

Diversification Opportunities for Coca Cola and V

0.0

Correlation Coefficient

Coca Cola  V

Pay attention - limited upside

The 3 months correlation between Coca and V is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Femsa SAB and V Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V Group 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 SAB are associated (or correlated) with V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V Group has no effect on the direction of Coca Cola i.e., Coca Cola and V go up and down completely randomly.

Pair Corralation between Coca Cola and V

If you would invest  7,799  in Coca Cola Femsa SAB on September 21, 2024 and sell it today you would earn a total of  66.00  from holding Coca Cola Femsa SAB or generate 0.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Coca Cola Femsa SAB  vs.  V Group

Coca Cola Femsa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coca Cola Femsa SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

V Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days V Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, V 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 V

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

The idea behind Coca Cola Femsa SAB and V Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.