Correlation Between Keurig Dr and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both Keurig Dr and AerCap Holdings 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 AerCap Holdings 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 AerCap Holdings NV, you can compare the effects of market volatilities on Keurig Dr and AerCap Holdings 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 AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and AerCap Holdings.
Diversification Opportunities for Keurig Dr and AerCap Holdings
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Keurig and AerCap is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV 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 AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of Keurig Dr i.e., Keurig Dr and AerCap Holdings go up and down completely randomly.
Pair Corralation between Keurig Dr and AerCap Holdings
Considering the 90-day investment horizon Keurig Dr is expected to generate 7.64 times less return on investment than AerCap Holdings. But when comparing it to its historical volatility, Keurig Dr Pepper is 1.22 times less risky than AerCap Holdings. It trades about 0.02 of its potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 5,820 in AerCap Holdings NV on August 29, 2024 and sell it today you would earn a total of 4,089 from holding AerCap Holdings NV or generate 70.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keurig Dr Pepper vs. AerCap Holdings NV
Performance |
| Timeline |
| Keurig Dr Pepper |
| AerCap Holdings NV |
Keurig Dr and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and AerCap Holdings
The main advantage of trading using opposite Keurig Dr and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, AerCap Holdings 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 AerCap Holdings will offset losses from the drop in AerCap Holdings' long position.| Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Coca Cola European Partners | Keurig Dr vs. Capital Income Builder | Keurig Dr vs. Direxion Daily FTSE |
| AerCap Holdings vs. Ryder System | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. GATX Corporation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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