Correlation Between Coca Cola and Sportsquest
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Sportsquest 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 Sportsquest 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 Sportsquest, you can compare the effects of market volatilities on Coca Cola and Sportsquest 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 Sportsquest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Sportsquest.
Diversification Opportunities for Coca Cola and Sportsquest
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coca and Sportsquest is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Sportsquest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsquest 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 Sportsquest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sportsquest has no effect on the direction of Coca Cola i.e., Coca Cola and Sportsquest go up and down completely randomly.
Pair Corralation between Coca Cola and Sportsquest
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 64.15 times less return on investment than Sportsquest. But when comparing it to its historical volatility, The Coca Cola is 39.83 times less risky than Sportsquest. It trades about 0.09 of its potential returns per unit of risk. Sportsquest is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Sportsquest on September 11, 2025 and sell it today you would lose (0.01) from holding Sportsquest or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
The Coca Cola vs. Sportsquest
Performance |
| Timeline |
| Coca Cola |
| Sportsquest |
Coca Cola and Sportsquest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Sportsquest
The main advantage of trading using opposite Coca Cola and Sportsquest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Sportsquest 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 Sportsquest will offset losses from the drop in Sportsquest's long position.| Coca Cola vs. PepsiCo | Coca Cola vs. Procter Gamble | Coca Cola vs. Philip Morris International | Coca Cola vs. Coca Cola European Partners |
| Sportsquest vs. Avew Holdings | Sportsquest vs. The Keller Manufacturing | Sportsquest vs. Prestige Cars International | Sportsquest vs. Adamas One Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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