Correlation Between Keurig Dr and Arhaus

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

Diversification Opportunities for Keurig Dr and Arhaus

-0.33

Correlation Coefficient

Keurig Dr  Arhaus

Very good diversification

The 3 months correlation between Keurig and Arhaus is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Arhaus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arhaus Inc 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 Arhaus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arhaus Inc has no effect on the direction of Keurig Dr i.e., Keurig Dr and Arhaus go up and down completely randomly.

Pair Corralation between Keurig Dr and Arhaus

Considering the 90-day investment horizon Keurig Dr is expected to generate 1.15 times less return on investment than Arhaus. But when comparing it to its historical volatility, Keurig Dr Pepper is 3.08 times less risky than Arhaus. It trades about 0.08 of its potential returns per unit of risk. Arhaus Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  926.00  in Arhaus Inc on December 27, 2024 and sell it today you would earn a total of  21.00  from holding Arhaus Inc or generate 2.27% 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.  Arhaus Inc

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 6 (%) 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.

Arhaus Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arhaus Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, Arhaus may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Keurig Dr and Arhaus

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

The idea behind Keurig Dr Pepper and Arhaus Inc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.