Correlation Between Keurig Dr and Blue Moon

Can any of the company-specific risk be diversified away by investing in both Keurig Dr and Blue Moon 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 Blue Moon 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 Blue Moon Metals, you can compare the effects of market volatilities on Keurig Dr and Blue Moon 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 Blue Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Blue Moon.

Diversification Opportunities for Keurig Dr and Blue Moon

-0.63

Correlation Coefficient

Keurig Dr  Blue Moon

Excellent diversification

The 3 months correlation between Keurig and Blue is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Blue Moon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Moon Metals 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 Blue Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Moon Metals has no effect on the direction of Keurig Dr i.e., Keurig Dr and Blue Moon go up and down completely randomly.

Pair Corralation between Keurig Dr and Blue Moon

Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Blue Moon. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 3.83 times less risky than Blue Moon. The stock trades about -0.11 of its potential returns per unit of risk. The Blue Moon Metals is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Blue Moon Metals on September 14, 2024 and sell it today you would earn a total of  7.00  from holding Blue Moon Metals or generate 38.89% return on investment over 90 days.

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

Keurig Dr Pepper  vs.  Blue Moon Metals

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 latest fragile 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.

Blue Moon Metals

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Moon Metals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blue Moon reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Keurig Dr and Blue Moon

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

The idea behind Keurig Dr Pepper and Blue Moon Metals 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.