Correlation Between Kroger and Keurig Dr
Can any of the company-specific risk be diversified away by investing in both Kroger and Keurig Dr 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 Kroger and Keurig Dr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and Keurig Dr Pepper, you can compare the effects of market volatilities on Kroger and Keurig Dr 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 Kroger with a short position of Keurig Dr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Keurig Dr.
Diversification Opportunities for Kroger and Keurig Dr
Excellent diversification
The 3 months correlation between Kroger and Keurig is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and Keurig Dr Pepper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keurig Dr Pepper and Kroger 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 Kroger Company are associated (or correlated) with Keurig Dr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keurig Dr Pepper has no effect on the direction of Kroger i.e., Kroger and Keurig Dr go up and down completely randomly.
Pair Corralation between Kroger and Keurig Dr
Allowing for the 90-day total investment horizon Kroger Company is expected to generate 0.86 times more return on investment than Keurig Dr. However, Kroger Company is 1.16 times less risky than Keurig Dr. It trades about 0.13 of its potential returns per unit of risk. Keurig Dr Pepper is currently generating about -0.16 per unit of risk. If you would invest 5,706 in Kroger Company on August 26, 2024 and sell it today you would earn a total of 216.00 from holding Kroger Company or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kroger Company vs. Keurig Dr Pepper
Performance |
| Timeline |
| Kroger Company |
| Keurig Dr Pepper |
Kroger and Keurig Dr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Keurig Dr
The main advantage of trading using opposite Kroger and Keurig Dr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, Keurig Dr 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 Keurig Dr will offset losses from the drop in Keurig Dr's long position.| Kroger vs. Hf Foods Group | Kroger vs. Innovative Food Hldg | Kroger vs. Calavo Growers | Kroger vs. The Chefs Warehouse |
| Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Vita Coco | Keurig Dr vs. PepsiCo | Keurig Dr vs. Coca Cola Femsa SAB |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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