Correlation Between Keurig Dr and Vistra Energy
Can any of the company-specific risk be diversified away by investing in both Keurig Dr and Vistra Energy 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 Vistra Energy 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 Vistra Energy Corp, you can compare the effects of market volatilities on Keurig Dr and Vistra Energy 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 Vistra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Vistra Energy.
Diversification Opportunities for Keurig Dr and Vistra Energy
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Keurig and Vistra is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Vistra Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vistra Energy 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 Vistra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vistra Energy Corp has no effect on the direction of Keurig Dr i.e., Keurig Dr and Vistra Energy go up and down completely randomly.
Pair Corralation between Keurig Dr and Vistra Energy
Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Vistra Energy. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 3.88 times less risky than Vistra Energy. The stock trades about -0.03 of its potential returns per unit of risk. The Vistra Energy Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 9,154 in Vistra Energy Corp on September 3, 2024 and sell it today you would earn a total of 6,830 from holding Vistra Energy Corp or generate 74.61% 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. Vistra Energy Corp
Performance |
| Timeline |
| Keurig Dr Pepper |
| Vistra Energy Corp |
Keurig Dr and Vistra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and Vistra Energy
The main advantage of trading using opposite Keurig Dr and Vistra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, Vistra Energy 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 Vistra Energy will offset losses from the drop in Vistra Energy's long position.| Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Vita Coco | Keurig Dr vs. PepsiCo | Keurig Dr vs. Coca Cola Femsa SAB |
| Vistra Energy vs. Pampa Energia SA | Vistra Energy vs. TransAlta Corp | Vistra Energy vs. Kenon Holdings | Vistra Energy vs. NRG Energy |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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