Correlation Between Coca Cola and CNS Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Coca Cola and CNS Pharmaceuticals 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 CNS Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and CNS Pharmaceuticals, you can compare the effects of market volatilities on Coca Cola and CNS Pharmaceuticals 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 CNS Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and CNS Pharmaceuticals.
Diversification Opportunities for Coca Cola and CNS Pharmaceuticals
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and CNS is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and CNS Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNS Pharmaceuticals 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 The Coca Cola are associated (or correlated) with CNS Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNS Pharmaceuticals has no effect on the direction of Coca Cola i.e., Coca Cola and CNS Pharmaceuticals go up and down completely randomly.
Pair Corralation between Coca Cola and CNS Pharmaceuticals
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.21 times more return on investment than CNS Pharmaceuticals. However, The Coca Cola is 4.78 times less risky than CNS Pharmaceuticals. It trades about 0.08 of its potential returns per unit of risk. CNS Pharmaceuticals is currently generating about 0.0 per unit of risk. If you would invest 6,683 in The Coca Cola on September 10, 2025 and sell it today you would earn a total of 342.00 from holding The Coca Cola or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. CNS Pharmaceuticals
Performance |
| Timeline |
| Coca Cola |
| CNS Pharmaceuticals |
Coca Cola and CNS Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and CNS Pharmaceuticals
The main advantage of trading using opposite Coca Cola and CNS Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, CNS Pharmaceuticals 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 CNS Pharmaceuticals will offset losses from the drop in CNS Pharmaceuticals' long position.| Coca Cola vs. PepsiCo | Coca Cola vs. Procter Gamble | Coca Cola vs. Philip Morris International | Coca Cola vs. Keurig Dr Pepper |
| CNS Pharmaceuticals vs. Windtree Therapeutics | CNS Pharmaceuticals vs. Pasithea Therapeutics Corp | CNS Pharmaceuticals vs. Soligenix | CNS Pharmaceuticals vs. Oragenics |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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