Correlation Between Keurig Dr and American Hotel
Can any of the company-specific risk be diversified away by investing in both Keurig Dr and American Hotel 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 American Hotel 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 American Hotel Income, you can compare the effects of market volatilities on Keurig Dr and American Hotel 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 American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and American Hotel.
Diversification Opportunities for Keurig Dr and American Hotel
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Keurig and American is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income 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 American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Keurig Dr i.e., Keurig Dr and American Hotel go up and down completely randomly.
Pair Corralation between Keurig Dr and American Hotel
Considering the 90-day investment horizon Keurig Dr Pepper is expected to generate 0.22 times more return on investment than American Hotel. However, Keurig Dr Pepper is 4.55 times less risky than American Hotel. It trades about 0.0 of its potential returns per unit of risk. American Hotel Income is currently generating about -0.03 per unit of risk. If you would invest 3,348 in Keurig Dr Pepper on October 22, 2024 and sell it today you would lose (186.00) from holding Keurig Dr Pepper or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.98% |
| Values | Daily Returns |
Keurig Dr Pepper vs. American Hotel Income
Performance |
| Timeline |
| Keurig Dr Pepper |
| American Hotel Income |
Keurig Dr and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and American Hotel
The main advantage of trading using opposite Keurig Dr and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, American Hotel 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 American Hotel will offset losses from the drop in American Hotel's long position.| Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Vita Coco | Keurig Dr vs. PepsiCo | Keurig Dr vs. Coca Cola Femsa SAB |
| American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Braemar Hotels Resorts | American Hotel vs. Braemar Hotels Resorts |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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