Correlation Between Keurig Dr and Altria
Can any of the company-specific risk be diversified away by investing in both Keurig Dr and Altria 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 Altria 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 Altria Group, you can compare the effects of market volatilities on Keurig Dr and Altria 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 Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Altria.
Diversification Opportunities for Keurig Dr and Altria
Pay attention - limited upside
The 3 months correlation between Keurig and Altria is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group 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 Altria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altria Group has no effect on the direction of Keurig Dr i.e., Keurig Dr and Altria go up and down completely randomly.
Pair Corralation between Keurig Dr and Altria
Considering the 90-day investment horizon Keurig Dr is expected to generate 3.63 times less return on investment than Altria. In addition to that, Keurig Dr is 1.01 times more volatile than Altria Group. It trades about 0.02 of its total potential returns per unit of risk. Altria Group is currently generating about 0.09 per unit of volatility. If you would invest 4,000 in Altria Group on September 4, 2024 and sell it today you would earn a total of 1,718 from holding Altria Group or generate 42.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keurig Dr Pepper vs. Altria Group
Performance |
| Timeline |
| Keurig Dr Pepper |
| Altria Group |
Keurig Dr and Altria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and Altria
The main advantage of trading using opposite Keurig Dr and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, Altria 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 Altria will offset losses from the drop in Altria's long position.| Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Vita Coco | Keurig Dr vs. PepsiCo | Keurig Dr vs. Coca Cola Femsa SAB |
| Altria vs. British American Tobacco | Altria vs. Universal | Altria vs. Imperial Brands PLC | Altria vs. Philip Morris International |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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