Correlation Between Iffe Futura and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Iffe Futura and Coca Cola 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 Iffe Futura and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iffe Futura SA and Coca Cola European Partners, you can compare the effects of market volatilities on Iffe Futura and Coca Cola 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 Iffe Futura with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iffe Futura and Coca Cola.
Diversification Opportunities for Iffe Futura and Coca Cola
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Iffe and Coca is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Iffe Futura SA and Coca Cola European Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola European and Iffe Futura 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 Iffe Futura SA are associated (or correlated) with Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola European has no effect on the direction of Iffe Futura i.e., Iffe Futura and Coca Cola go up and down completely randomly.
Pair Corralation between Iffe Futura and Coca Cola
Assuming the 90 days trading horizon Iffe Futura SA is expected to generate 1.55 times more return on investment than Coca Cola. However, Iffe Futura is 1.55 times more volatile than Coca Cola European Partners. It trades about 0.15 of its potential returns per unit of risk. Coca Cola European Partners is currently generating about 0.11 per unit of risk. If you would invest 63.00 in Iffe Futura SA on April 23, 2025 and sell it today you would earn a total of 10.00 from holding Iffe Futura SA or generate 15.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Iffe Futura SA vs. Coca Cola European Partners
Performance |
Timeline |
Iffe Futura SA |
Coca Cola European |
Iffe Futura and Coca Cola Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Iffe Futura and Coca Cola
The main advantage of trading using opposite Iffe Futura and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iffe Futura position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.Iffe Futura vs. Arrienda Rental Properties | Iffe Futura vs. Media Investment Optimization | Iffe Futura vs. Arteche Lantegi Elkartea | Iffe Futura vs. International Consolidated Airlines |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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