Correlation Between Grocery Outlet and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet 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 Grocery Outlet and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grocery Outlet Holding and Coca Cola Femsa SAB, you can compare the effects of market volatilities on Grocery Outlet 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 Grocery Outlet with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Coca Cola.
Diversification Opportunities for Grocery Outlet and Coca Cola
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grocery and Coca is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Coca Cola Femsa SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Femsa and Grocery Outlet 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 Grocery Outlet Holding 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 Femsa has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Coca Cola go up and down completely randomly.
Pair Corralation between Grocery Outlet and Coca Cola
Allowing for the 90-day total investment horizon Grocery Outlet is expected to generate 7.64 times less return on investment than Coca Cola. In addition to that, Grocery Outlet is 1.5 times more volatile than Coca Cola Femsa SAB. It trades about 0.02 of its total potential returns per unit of risk. Coca Cola Femsa SAB is currently generating about 0.18 per unit of volatility. If you would invest 8,563 in Coca Cola Femsa SAB on July 2, 2024 and sell it today you would earn a total of 477.00 from holding Coca Cola Femsa SAB or generate 5.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Grocery Outlet Holding vs. Coca Cola Femsa SAB
Performance |
Timeline |
Grocery Outlet Holding |
Coca Cola Femsa |
Grocery Outlet and Coca Cola Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grocery Outlet and Coca Cola
The main advantage of trading using opposite Grocery Outlet and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet 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.Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
Coca Cola vs. Fomento Economico Mexicano | Coca Cola vs. Grupo Televisa SAB | Coca Cola vs. Grupo Aeroportuario del | Coca Cola vs. Grupo Aeroportuario del |
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 the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |