Correlation Between Keurig Dr and Country Garden

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

Diversification Opportunities for Keurig Dr and Country Garden

-0.43

Correlation Coefficient

Keurig Dr  Country Garden

Very good diversification

The 3 months correlation between Keurig and Country is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Country Garden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Garden Holdings 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 Country Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Garden Holdings has no effect on the direction of Keurig Dr i.e., Keurig Dr and Country Garden go up and down completely randomly.

Pair Corralation between Keurig Dr and Country Garden

If you would invest  3,124  in Keurig Dr Pepper on September 17, 2024 and sell it today you would earn a total of  231.00  from holding Keurig Dr Pepper or generate 7.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Keurig Dr Pepper  vs.  Country Garden Holdings

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.

Country Garden Holdings

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with Keurig Dr and Country Garden

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

The idea behind Keurig Dr Pepper and Country Garden Holdings 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.