Correlation Between Butterfly Network and KEURIG

Can any of the company-specific risk be diversified away by investing in both Butterfly Network and KEURIG 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 Butterfly Network and KEURIG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Butterfly Network and KEURIG DR PEPPER, you can compare the effects of market volatilities on Butterfly Network and KEURIG 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 Butterfly Network with a short position of KEURIG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Butterfly Network and KEURIG.

Diversification Opportunities for Butterfly Network and KEURIG

-0.51

Correlation Coefficient

Butterfly Network  KEURIG

Excellent diversification

The 3 months correlation between Butterfly and KEURIG is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Butterfly Network 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 Butterfly Network 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 Butterfly Network are associated (or correlated) with KEURIG. 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 Butterfly Network i.e., Butterfly Network and KEURIG go up and down completely randomly.

Pair Corralation between Butterfly Network and KEURIG

Given the investment horizon of 90 days Butterfly Network is expected to generate 8.67 times more return on investment than KEURIG. However, Butterfly Network is 8.67 times more volatile than KEURIG DR PEPPER. It trades about 0.01 of its potential returns per unit of risk. KEURIG DR PEPPER is currently generating about -0.06 per unit of risk. If you would invest  331.00  in Butterfly Network on December 3, 2024 and sell it today you would lose (27.00) from holding Butterfly Network or give up 8.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	72.13%
Values	Daily Returns

Butterfly Network  vs.  KEURIG DR PEPPER

Butterfly Network

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Butterfly Network are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Butterfly Network may actually be approaching a critical reversion point that can send shares even higher in April 2025.

KEURIG DR PEPPER

Risk-Adjusted Performance

Very Weak

Over the last 90 days KEURIG DR PEPPER has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KEURIG is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Butterfly Network and KEURIG

The main advantage of trading using opposite Butterfly Network and KEURIG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Butterfly Network position performs unexpectedly, KEURIG 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 will offset losses from the drop in KEURIG's long position.

The idea behind Butterfly Network and KEURIG DR PEPPER pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.