Correlation Between Getty Images and Keurig Dr

Can any of the company-specific risk be diversified away by investing in both Getty Images and Keurig Dr 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 Getty Images and Keurig Dr into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Getty Images Holdings and Keurig Dr Pepper, you can compare the effects of market volatilities on Getty Images and Keurig Dr 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 Getty Images with a short position of Keurig Dr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Keurig Dr.

Diversification Opportunities for Getty Images and Keurig Dr

0.53

Correlation Coefficient

Getty Images  Keurig Dr

Very weak diversification

The 3 months correlation between Getty and Keurig is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Keurig Dr Pepper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keurig Dr Pepper and Getty Images 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 Getty Images Holdings are associated (or correlated) with Keurig Dr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keurig Dr Pepper has no effect on the direction of Getty Images i.e., Getty Images and Keurig Dr go up and down completely randomly.

Pair Corralation between Getty Images and Keurig Dr

Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Keurig Dr. In addition to that, Getty Images is 3.17 times more volatile than Keurig Dr Pepper. It trades about -0.29 of its total potential returns per unit of risk. Keurig Dr Pepper is currently generating about 0.02 per unit of volatility. If you would invest  3,224  in Keurig Dr Pepper on September 22, 2024 and sell it today you would earn a total of  13.00  from holding Keurig Dr Pepper or generate 0.4% return on investment over 90 days.

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

Getty Images Holdings  vs.  Keurig Dr Pepper

Getty Images Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Images Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Keurig Dr Pepper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keurig Dr Pepper has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Getty Images and Keurig Dr

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

The idea behind Getty Images Holdings and Keurig Dr Pepper 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.