Correlation Between Keurig Dr and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both Keurig Dr and USWE SPORTS 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 USWE SPORTS 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 USWE SPORTS AB, you can compare the effects of market volatilities on Keurig Dr and USWE SPORTS 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 USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and USWE SPORTS.
Diversification Opportunities for Keurig Dr and USWE SPORTS
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Keurig and USWE is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB 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 USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of Keurig Dr i.e., Keurig Dr and USWE SPORTS go up and down completely randomly.
Pair Corralation between Keurig Dr and USWE SPORTS
Assuming the 90 days horizon Keurig Dr Pepper is expected to generate 0.88 times more return on investment than USWE SPORTS. However, Keurig Dr Pepper is 1.13 times less risky than USWE SPORTS. It trades about 0.03 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about -0.2 per unit of risk. If you would invest 3,141 in Keurig Dr Pepper on September 13, 2024 and sell it today you would earn a total of 23.00 from holding Keurig Dr Pepper or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keurig Dr Pepper vs. USWE SPORTS AB
Performance |
| Timeline |
| Keurig Dr Pepper |
| USWE SPORTS AB |
Keurig Dr and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and USWE SPORTS
The main advantage of trading using opposite Keurig Dr and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.| Keurig Dr vs. Grand Canyon Education | Keurig Dr vs. Major Drilling Group | Keurig Dr vs. Laureate Education | Keurig Dr vs. Scandinavian Tobacco Group |
| USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. SIVERS SEMICONDUCTORS AB | USWE SPORTS vs. Norsk Hydro ASA | USWE SPORTS vs. Reliance Steel Aluminum |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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