Correlation Between Keurig Dr and Nextplat Corp
Can any of the company-specific risk be diversified away by investing in both Keurig Dr and Nextplat Corp 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 Nextplat Corp 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 Nextplat Corp, you can compare the effects of market volatilities on Keurig Dr and Nextplat Corp 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 Nextplat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Nextplat Corp.
Diversification Opportunities for Keurig Dr and Nextplat Corp
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Keurig and Nextplat is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat Corp 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 Nextplat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextplat Corp has no effect on the direction of Keurig Dr i.e., Keurig Dr and Nextplat Corp go up and down completely randomly.
Pair Corralation between Keurig Dr and Nextplat Corp
Considering the 90-day investment horizon Keurig Dr Pepper is expected to generate 0.18 times more return on investment than Nextplat Corp. However, Keurig Dr Pepper is 5.44 times less risky than Nextplat Corp. It trades about -0.04 of its potential returns per unit of risk. Nextplat Corp is currently generating about -0.12 per unit of risk. If you would invest 3,299 in Keurig Dr Pepper on August 31, 2024 and sell it today you would lose (41.00) from holding Keurig Dr Pepper or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keurig Dr Pepper vs. Nextplat Corp
Performance |
| Timeline |
| Keurig Dr Pepper |
| Nextplat Corp |
Keurig Dr and Nextplat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and Nextplat Corp
The main advantage of trading using opposite Keurig Dr and Nextplat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, Nextplat Corp 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 Nextplat Corp will offset losses from the drop in Nextplat Corp's long position.| Keurig Dr vs. Monster Beverage Corp | Keurig Dr vs. RLJ Lodging Trust | Keurig Dr vs. Aquagold International | Keurig Dr vs. Stepstone Group |
| Nextplat Corp vs. RenoWorks Software | Nextplat Corp vs. LifeSpeak | Nextplat Corp vs. 01 Communique Laboratory | Nextplat Corp vs. Where Food Comes |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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