Correlation Between Coca Cola and Optima Bank

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

By analyzing existing cross correlation between Coca Cola HBC AG and Optima bank SA, you can compare the effects of market volatilities on Coca Cola and Optima Bank 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 Optima Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Optima Bank.

Diversification Opportunities for Coca Cola and Optima Bank

0.35

Correlation Coefficient

Coca Cola  Optima Bank

Weak diversification

The 3 months correlation between Coca and Optima is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola HBC AG and Optima bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optima bank SA 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 HBC AG are associated (or correlated) with Optima Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optima bank SA has no effect on the direction of Coca Cola i.e., Coca Cola and Optima Bank go up and down completely randomly.

Pair Corralation between Coca Cola and Optima Bank

Assuming the 90 days trading horizon Coca Cola is expected to generate 8.51 times less return on investment than Optima Bank. But when comparing it to its historical volatility, Coca Cola HBC AG is 1.96 times less risky than Optima Bank. It trades about 0.08 of its potential returns per unit of risk. Optima bank SA is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  455.00  in Optima bank SA on April 22, 2025 and sell it today you would earn a total of  274.00  from holding Optima bank SA or generate 60.22% return on investment over 90 days.

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

Coca Cola HBC AG  vs.  Optima bank SA

Coca Cola HBC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola HBC AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Coca Cola is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Optima bank SA

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Optima bank SA are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Optima Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coca Cola and Optima Bank

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

The idea behind Coca Cola HBC AG and Optima bank SA 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.