Correlation Between Keurig Dr and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both Keurig Dr and Uber Technologies 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 Uber Technologies 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 Uber Technologies, you can compare the effects of market volatilities on Keurig Dr and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Uber Technologies.
Diversification Opportunities for Keurig Dr and Uber Technologies
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Keurig and Uber is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Keurig Dr i.e., Keurig Dr and Uber Technologies go up and down completely randomly.
Pair Corralation between Keurig Dr and Uber Technologies
Considering the 90-day investment horizon Keurig Dr is expected to generate 6.3 times less return on investment than Uber Technologies. But when comparing it to its historical volatility, Keurig Dr Pepper is 2.05 times less risky than Uber Technologies. It trades about 0.02 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,099 in Uber Technologies on September 1, 2024 and sell it today you would earn a total of 3,097 from holding Uber Technologies or generate 75.56% 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. Uber Technologies
Performance |
| Timeline |
| Keurig Dr Pepper |
| Uber Technologies |
Keurig Dr and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and Uber Technologies
The main advantage of trading using opposite Keurig Dr and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.| Keurig Dr vs. Vita Coco | Keurig Dr vs. Coca Cola Femsa SAB | Keurig Dr vs. Embotelladora Andina SA | Keurig Dr vs. National Beverage Corp |
| Uber Technologies vs. Zoom Video Communications | Uber Technologies vs. Snowflake | Uber Technologies vs. Workday | Uber Technologies vs. C3 Ai Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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