Correlation Between Coca Cola and Akbank TAS
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Akbank TAS 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 Akbank TAS 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 Akbank TAS, you can compare the effects of market volatilities on Coca Cola and Akbank TAS 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 Akbank TAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Akbank TAS.
Diversification Opportunities for Coca Cola and Akbank TAS
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coca and Akbank is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Icecek AS and Akbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank TAS 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 Akbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akbank TAS has no effect on the direction of Coca Cola i.e., Coca Cola and Akbank TAS go up and down completely randomly.
Pair Corralation between Coca Cola and Akbank TAS
Assuming the 90 days trading horizon Coca Cola Icecek AS is expected to generate 13.33 times more return on investment than Akbank TAS. However, Coca Cola is 13.33 times more volatile than Akbank TAS. It trades about 0.05 of its potential returns per unit of risk. Akbank TAS is currently generating about 0.09 per unit of risk. If you would invest 1,869 in Coca Cola Icecek AS on September 23, 2024 and sell it today you would earn a total of 3,966 from holding Coca Cola Icecek AS or generate 212.2% 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. Akbank TAS
Performance |
Timeline |
Coca Cola Icecek |
Akbank TAS |
Coca Cola and Akbank TAS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and Akbank TAS
The main advantage of trading using opposite Coca Cola and Akbank TAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Akbank TAS 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 Akbank TAS will offset losses from the drop in Akbank TAS's long position.Coca Cola vs. Trabzon Liman Isletmeciligi | Coca Cola vs. Bayrak EBT Taban | Coca Cola vs. Alkim Kagit Sanayi | Coca Cola vs. Federal Mogul Izmit |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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