Correlation Between Keurig Dr and Alkame Holdings

Can any of the company-specific risk be diversified away by investing in both Keurig Dr and Alkame Holdings 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 Alkame Holdings 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 Alkame Holdings, you can compare the effects of market volatilities on Keurig Dr and Alkame Holdings 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 Alkame Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Alkame Holdings.

Diversification Opportunities for Keurig Dr and Alkame Holdings

-0.04

Correlation Coefficient

Keurig Dr  Alkame Holdings

Good diversification

The 3 months correlation between Keurig and Alkame is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Alkame Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkame Holdings 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 Alkame Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkame Holdings has no effect on the direction of Keurig Dr i.e., Keurig Dr and Alkame Holdings go up and down completely randomly.

Pair Corralation between Keurig Dr and Alkame Holdings

Considering the 90-day investment horizon Keurig Dr is expected to generate 109.09 times less return on investment than Alkame Holdings. But when comparing it to its historical volatility, Keurig Dr Pepper is 93.56 times less risky than Alkame Holdings. It trades about 0.1 of its potential returns per unit of risk. Alkame Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Alkame Holdings on December 28, 2024 and sell it today you would earn a total of  0.00  from holding Alkame Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Keurig Dr Pepper  vs.  Alkame Holdings

Keurig Dr Pepper

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Keurig Dr Pepper are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental indicators, Keurig Dr may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Alkame Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alkame Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward-looking signals, Alkame Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Keurig Dr and Alkame Holdings

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

The idea behind Keurig Dr Pepper and Alkame Holdings 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.