Correlation Between Keurig Dr and MoneyHero Limited

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

Diversification Opportunities for Keurig Dr and MoneyHero Limited

-0.56

Correlation Coefficient

Keurig Dr  MoneyHero Limited

Excellent diversification

The 3 months correlation between Keurig and MoneyHero is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and MoneyHero Limited Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyHero Limited Class 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 MoneyHero Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneyHero Limited Class has no effect on the direction of Keurig Dr i.e., Keurig Dr and MoneyHero Limited go up and down completely randomly.

Pair Corralation between Keurig Dr and MoneyHero Limited

Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the MoneyHero Limited. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 2.5 times less risky than MoneyHero Limited. The stock trades about -0.18 of its potential returns per unit of risk. The MoneyHero Limited Class is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  109.00  in MoneyHero Limited Class on September 29, 2024 and sell it today you would earn a total of  3.00  from holding MoneyHero Limited Class or generate 2.75% return on investment over 90 days.

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

Keurig Dr Pepper  vs.  MoneyHero Limited Class

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.

MoneyHero Limited Class

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MoneyHero Limited Class are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, MoneyHero Limited is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Keurig Dr and MoneyHero Limited

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

The idea behind Keurig Dr Pepper and MoneyHero Limited Class 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.