Correlation Between Seaboard and COCA A

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

By analyzing existing cross correlation between Seaboard and COCA A HBC, you can compare the effects of market volatilities on Seaboard and COCA A 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 Seaboard with a short position of COCA A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seaboard and COCA A.

Diversification Opportunities for Seaboard and COCA A

-0.43

Correlation Coefficient

Seaboard  COCA A

Very good diversification

The 3 months correlation between Seaboard and COCA is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Seaboard and COCA A HBC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A HBC and Seaboard 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 Seaboard are associated (or correlated) with COCA A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A HBC has no effect on the direction of Seaboard i.e., Seaboard and COCA A go up and down completely randomly.

Pair Corralation between Seaboard and COCA A

Assuming the 90 days horizon Seaboard is expected to under-perform the COCA A. But the stock apears to be less risky and, when comparing its historical volatility, Seaboard is 1.29 times less risky than COCA A. The stock trades about -0.2 of its potential returns per unit of risk. The COCA A HBC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3,220  in COCA A HBC on September 28, 2024 and sell it today you would earn a total of  0.00  from holding COCA A HBC or generate 0.0% return on investment over 90 days.

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

Seaboard  vs.  COCA A HBC

Seaboard

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seaboard has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

COCA A HBC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COCA A HBC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, COCA A is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Seaboard and COCA A

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

The idea behind Seaboard and COCA A HBC 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.