Correlation Between Keurig Dr and Whitbread Plc
Can any of the company-specific risk be diversified away by investing in both Keurig Dr and Whitbread Plc 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 Whitbread Plc 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 Whitbread plc, you can compare the effects of market volatilities on Keurig Dr and Whitbread Plc 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 Whitbread Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Whitbread Plc.
Diversification Opportunities for Keurig Dr and Whitbread Plc
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Keurig and Whitbread is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Whitbread plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread plc 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 Whitbread Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread plc has no effect on the direction of Keurig Dr i.e., Keurig Dr and Whitbread Plc go up and down completely randomly.
Pair Corralation between Keurig Dr and Whitbread Plc
Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Whitbread Plc. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 1.74 times less risky than Whitbread Plc. The stock trades about -0.05 of its potential returns per unit of risk. The Whitbread plc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,751 in Whitbread plc on October 26, 2024 and sell it today you would lose (155.00) from holding Whitbread plc or give up 4.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keurig Dr Pepper vs. Whitbread plc
Performance |
| Timeline |
| Keurig Dr Pepper |
| Whitbread plc |
Keurig Dr and Whitbread Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and Whitbread Plc
The main advantage of trading using opposite Keurig Dr and Whitbread Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, Whitbread Plc 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 Whitbread Plc will offset losses from the drop in Whitbread Plc's long position.| Keurig Dr vs. PepsiCo | Keurig Dr vs. Vita Coco | Keurig Dr vs. Aquagold International | Keurig Dr vs. Thrivent High Yield |
| Whitbread Plc vs. Cheniere Energy Partners | Whitbread Plc vs. Vasta Platform | Whitbread Plc vs. Summit Midstream | Whitbread Plc vs. Kenon Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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