Correlation Between Keurig Dr and 63254ABG2

Can any of the company-specific risk be diversified away by investing in both Keurig Dr and 63254ABG2 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 63254ABG2 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 NAB 5132 22 NOV 24, you can compare the effects of market volatilities on Keurig Dr and 63254ABG2 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 63254ABG2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and 63254ABG2.

Diversification Opportunities for Keurig Dr and 63254ABG2

-0.59

Correlation Coefficient

Keurig Dr  63254ABG2

Excellent diversification

The 3 months correlation between Keurig and 63254ABG2 is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and NAB 5132 22 NOV 24 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAB 5132 22 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 63254ABG2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAB 5132 22 has no effect on the direction of Keurig Dr i.e., Keurig Dr and 63254ABG2 go up and down completely randomly.

Pair Corralation between Keurig Dr and 63254ABG2

Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the 63254ABG2. In addition to that, Keurig Dr is 7.65 times more volatile than NAB 5132 22 NOV 24. It trades about -0.18 of its total potential returns per unit of risk. NAB 5132 22 NOV 24 is currently generating about 0.2 per unit of volatility. If you would invest  10,001  in NAB 5132 22 NOV 24 on September 26, 2024 and sell it today you would earn a total of  76.00  from holding NAB 5132 22 NOV 24 or generate 0.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	36.51%
Values	Daily Returns

Keurig Dr Pepper  vs.  NAB 5132 22 NOV 24

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.

NAB 5132 22

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NAB 5132 22 NOV 24 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 63254ABG2 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Keurig Dr and 63254ABG2

The main advantage of trading using opposite Keurig Dr and 63254ABG2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, 63254ABG2 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 63254ABG2 will offset losses from the drop in 63254ABG2's long position.

The idea behind Keurig Dr Pepper and NAB 5132 22 NOV 24 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.