Correlation Between Keurig Dr and Brunswick

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

Diversification Opportunities for Keurig Dr and Brunswick

-0.61

Correlation Coefficient

Keurig Dr  Brunswick

Excellent diversification

The 3 months correlation between Keurig and Brunswick is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick 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 Brunswick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick has no effect on the direction of Keurig Dr i.e., Keurig Dr and Brunswick go up and down completely randomly.

Pair Corralation between Keurig Dr and Brunswick

Considering the 90-day investment horizon Keurig Dr Pepper is expected to generate 0.68 times more return on investment than Brunswick. However, Keurig Dr Pepper is 1.46 times less risky than Brunswick. It trades about 0.06 of its potential returns per unit of risk. Brunswick is currently generating about -0.09 per unit of risk. If you would invest  3,208  in Keurig Dr Pepper on December 25, 2024 and sell it today you would earn a total of  147.00  from holding Keurig Dr Pepper or generate 4.58% return on investment over 90 days.

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

Keurig Dr Pepper  vs.  Brunswick

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.

Brunswick

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brunswick has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Keurig Dr and Brunswick

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

The idea behind Keurig Dr Pepper and Brunswick 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.