Correlation Between Coca Cola and Touchstone Large
Can any of the company-specific risk be diversified away by investing in both Coca Cola and Touchstone Large 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 Touchstone Large 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 Touchstone Large Cap, you can compare the effects of market volatilities on Coca Cola and Touchstone Large 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 Touchstone Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Touchstone Large.
Diversification Opportunities for Coca Cola and Touchstone Large
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coca and Touchstone is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Touchstone Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Large Cap 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 Touchstone Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Large Cap has no effect on the direction of Coca Cola i.e., Coca Cola and Touchstone Large go up and down completely randomly.
Pair Corralation between Coca Cola and Touchstone Large
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 1.55 times more return on investment than Touchstone Large. However, Coca Cola is 1.55 times more volatile than Touchstone Large Cap. It trades about 0.1 of its potential returns per unit of risk. Touchstone Large Cap is currently generating about -0.02 per unit of risk. If you would invest 6,831 in The Coca Cola on August 27, 2025 and sell it today you would earn a total of 428.00 from holding The Coca Cola or generate 6.27% 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. Touchstone Large Cap
Performance |
| Timeline |
| Coca Cola |
| Touchstone Large Cap |
Coca Cola and Touchstone Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Touchstone Large
The main advantage of trading using opposite Coca Cola and Touchstone Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Touchstone Large 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 Touchstone Large will offset losses from the drop in Touchstone Large's long position.| Coca Cola vs. Trade Desk | Coca Cola vs. Lippo Malls Indonesia | Coca Cola vs. Hyster Yale Materials Handling | Coca Cola vs. Fast Retailing Co |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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