Correlation Between Advanced Micro and Keurig Dr
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and Keurig Dr 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 Advanced Micro and Keurig Dr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Keurig Dr Pepper, you can compare the effects of market volatilities on Advanced Micro and Keurig Dr 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 Advanced Micro with a short position of Keurig Dr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Keurig Dr.
Diversification Opportunities for Advanced Micro and Keurig Dr
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advanced and Keurig is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Keurig Dr Pepper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keurig Dr Pepper and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with Keurig Dr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keurig Dr Pepper has no effect on the direction of Advanced Micro i.e., Advanced Micro and Keurig Dr go up and down completely randomly.
Pair Corralation between Advanced Micro and Keurig Dr
Considering the 90-day investment horizon Advanced Micro Devices is expected to generate 1.74 times more return on investment than Keurig Dr. However, Advanced Micro is 1.74 times more volatile than Keurig Dr Pepper. It trades about -0.14 of its potential returns per unit of risk. Keurig Dr Pepper is currently generating about -0.32 per unit of risk. If you would invest 15,291 in Advanced Micro Devices on August 24, 2024 and sell it today you would lose (1,542) from holding Advanced Micro Devices or give up 10.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. Keurig Dr Pepper
Performance |
| Timeline |
| Advanced Micro Devices |
| Keurig Dr Pepper |
Advanced Micro and Keurig Dr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Keurig Dr
The main advantage of trading using opposite Advanced Micro and Keurig Dr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, Keurig Dr 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 Keurig Dr will offset losses from the drop in Keurig Dr's long position.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
| Keurig Dr vs. Monster Beverage Corp | Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Coca Cola Femsa SAB | Keurig Dr vs. Vita Coco |
Check out your portfolio center.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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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