Correlation Between Keurig Dr and Aterian

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Can any of the company-specific risk be diversified away by investing in both Keurig Dr and Aterian 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 Keurig Dr and Aterian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keurig Dr Pepper and Aterian, you can compare the effects of market volatilities on Keurig Dr and Aterian 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 Keurig Dr with a short position of Aterian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Aterian.

Diversification Opportunities for Keurig Dr and Aterian

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Keurig and Aterian is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Aterian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aterian and Keurig Dr 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 Keurig Dr Pepper are associated (or correlated) with Aterian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aterian has no effect on the direction of Keurig Dr i.e., Keurig Dr and Aterian go up and down completely randomly.

Pair Corralation between Keurig Dr and Aterian

Considering the 90-day investment horizon Keurig Dr is expected to generate 3.63 times less return on investment than Aterian. But when comparing it to its historical volatility, Keurig Dr Pepper is 4.18 times less risky than Aterian. It trades about 0.04 of its potential returns per unit of risk. Aterian is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  213.00  in Aterian on September 18, 2024 and sell it today you would earn a total of  15.00  from holding Aterian or generate 7.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Keurig Dr Pepper  vs.  Aterian

 Performance 
       Timeline  
Keurig Dr Pepper 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest inconsistent performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.
Aterian 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aterian has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's technical and 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.

Keurig Dr and Aterian Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Keurig Dr and Aterian

The main advantage of trading using opposite Keurig Dr and Aterian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, Aterian 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 Aterian will offset losses from the drop in Aterian's long position.
The idea behind Keurig Dr Pepper and Aterian 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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