Correlation Between Keurig Dr and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both Keurig Dr and Procter Gamble 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 Procter Gamble 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 Procter Gamble, you can compare the effects of market volatilities on Keurig Dr and Procter Gamble 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 Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Procter Gamble.
Diversification Opportunities for Keurig Dr and Procter Gamble
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Keurig and Procter is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble 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 Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble has no effect on the direction of Keurig Dr i.e., Keurig Dr and Procter Gamble go up and down completely randomly.
Pair Corralation between Keurig Dr and Procter Gamble
Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Procter Gamble. In addition to that, Keurig Dr is 1.2 times more volatile than Procter Gamble. It trades about -0.02 of its total potential returns per unit of risk. Procter Gamble is currently generating about 0.28 per unit of volatility. If you would invest 16,717 in Procter Gamble on August 30, 2024 and sell it today you would earn a total of 1,219 from holding Procter Gamble or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keurig Dr Pepper vs. Procter Gamble
Performance |
| Timeline |
| Keurig Dr Pepper |
| Procter Gamble |
Keurig Dr and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and Procter Gamble
The main advantage of trading using opposite Keurig Dr and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, Procter Gamble 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 Procter Gamble will offset losses from the drop in Procter Gamble's long position.| Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Vita Coco | Keurig Dr vs. PepsiCo | Keurig Dr vs. Coca Cola Femsa SAB |
| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Kimberly Clark |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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