Coca-Cola shows negative beta with 18.9% annual volatility

Coca-Cola (KO) shares exhibited a negative correlation with the S&P 500 over the past year, recording a beta of minus 0.25. The beverage maker, valued at approximately $388 billion, tended to rise on days when the broader market fell. It captured minimal gains during index up days.

Over the last twelve months, the S&P 500 declined by an average of 0.58% on down days. A $10,000 position in Coca-Cola increased by roughly $24. Conversely, on the index's up days, which averaged a 0.65% gain, the same $10,000 stake added only about $2. Despite this counter-trend behavior, Coca-Cola displayed higher volatility than the benchmark index. It registered 18.9% annually compared with the S&P 500's 12.7%. During the index's worst month in that period, the S&P 500 dropped 5.1%. The $10,000 Coca-Cola position lost approximately $676, a 6.8% decline.

Longer-term performance metrics show Coca-Cola returned 14.5% annually over the past five years. This slightly outpaced the S&P 500's 13.9% annual return. The stock achieved these gains with lower volatility of 16.7% per year versus the index's 17.1%. This results in a return-to-volatility ratio of 0.87 for Coca-Cola and 0.81 for the S&P 500. The correlation between the two assets over this five-year span was 0.26. This indicates loose tracking of market movements.

Coca-Cola recently updated its financial outlook for fiscal 2026, raising its forecast for organic revenue growth to approximately 5%. This figure sits at the upper end of previous guidance. It aligns with the company's long-term target range of 4% to 6%. The company's revenue is geographically diversified. North America generated $19.6 billion of its total $47.9 billion in fiscal 2025 revenue. The Europe, Middle East & Africa segment contributed the next largest portion of revenue.

An ongoing tax dispute with the Internal Revenue Service remains unresolved as the company pursues an appeal. During an earnings call in July 2026, management stated that the timing of the appeals court's decision is unknown. The company characterized any future ruling as isolated news rather than a market-moving event.

Investors considering Coca-Cola for portfolio stability should note that its recent volatility has widened from its five-year average. If held alongside other consumer staples or soft drink companies, the stock may offer less diversification benefit than when paired with a standard index fund alone.