Correlation Between Keurig Dr and Boston Beer
Can any of the company-specific risk be diversified away by investing in both Keurig Dr and Boston Beer 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 Boston Beer 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 Boston Beer, you can compare the effects of market volatilities on Keurig Dr and Boston Beer 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 Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Boston Beer.
Diversification Opportunities for Keurig Dr and Boston Beer
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Keurig and Boston is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer 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 Boston Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Beer has no effect on the direction of Keurig Dr i.e., Keurig Dr and Boston Beer go up and down completely randomly.
Pair Corralation between Keurig Dr and Boston Beer
Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Boston Beer. In addition to that, Keurig Dr is 1.16 times more volatile than Boston Beer. It trades about -0.32 of its total potential returns per unit of risk. Boston Beer is currently generating about 0.06 per unit of volatility. If you would invest 30,151 in Boston Beer on August 24, 2024 and sell it today you would earn a total of 567.00 from holding Boston Beer or generate 1.88% 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. Boston Beer
Performance |
| Timeline |
| Keurig Dr Pepper |
| Boston Beer |
Keurig Dr and Boston Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and Boston Beer
The main advantage of trading using opposite Keurig Dr and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, Boston Beer 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 Boston Beer will offset losses from the drop in Boston Beer's long position.| Keurig Dr vs. Monster Beverage Corp | Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Coca Cola Femsa SAB | Keurig Dr vs. Vita Coco |
| Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Fomento Economico Mexicano | Boston Beer vs. Tsingtao Brewery Co | Boston Beer vs. Carlsberg AS |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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