Correlation Between Keurig Dr and Aterian

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

Diversification Opportunities for Keurig Dr and Aterian

-0.45

Correlation Coefficient

Keurig Dr  Aterian

Very good diversification

The 3 months correlation between Keurig and Aterian is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Aterian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aterian 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 Aterian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aterian has no effect on the direction of Keurig Dr i.e., Keurig Dr and Aterian go up and down completely randomly.

Pair Corralation between Keurig Dr and Aterian

Considering the 90-day investment horizon Keurig Dr is expected to generate 6.09 times less return on investment than Aterian. But when comparing it to its historical volatility, Keurig Dr Pepper is 4.21 times less risky than Aterian. It trades about 0.06 of its potential returns per unit of risk. Aterian is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  224.00  in Aterian on December 20, 2024 and sell it today you would earn a total of  46.00  from holding Aterian or generate 20.54% return on investment over 90 days.

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

Keurig Dr Pepper  vs.  Aterian

Keurig Dr Pepper

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Keurig Dr Pepper are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Keurig Dr is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Aterian

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aterian are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical and fundamental indicators, Aterian reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Keurig Dr and Aterian

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

The idea behind Keurig Dr Pepper and Aterian 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.