Correlation Between Coca Cola and Haci Omer

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

By analyzing existing cross correlation between Coca Cola Icecek AS and Haci Omer Sabanci, you can compare the effects of market volatilities on Coca Cola and Haci Omer 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 Haci Omer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Haci Omer.

Diversification Opportunities for Coca Cola and Haci Omer

0.85

Correlation Coefficient

Coca Cola  Haci Omer

Very poor diversification

The 3 months correlation between Coca and Haci is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Icecek AS and Haci Omer Sabanci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haci Omer Sabanci 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 Icecek AS are associated (or correlated) with Haci Omer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haci Omer Sabanci has no effect on the direction of Coca Cola i.e., Coca Cola and Haci Omer go up and down completely randomly.

Pair Corralation between Coca Cola and Haci Omer

Assuming the 90 days trading horizon Coca Cola is expected to generate 1.34 times less return on investment than Haci Omer. But when comparing it to its historical volatility, Coca Cola Icecek AS is 1.17 times less risky than Haci Omer. It trades about 0.43 of its potential returns per unit of risk. Haci Omer Sabanci is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest  8,245  in Haci Omer Sabanci on February 12, 2024 and sell it today you would earn a total of  1,425  from holding Haci Omer Sabanci or generate 17.28% return on investment over 90 days.

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

Coca Cola Icecek AS  vs.  Haci Omer Sabanci

Coca Cola Icecek

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola Icecek AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Coca Cola demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Haci Omer Sabanci

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Haci Omer Sabanci are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent essential indicators, Haci Omer demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coca Cola and Haci Omer

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

The idea behind Coca Cola Icecek AS and Haci Omer Sabanci 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.