Correlation Between Keurig Dr and Caldas Gold

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

Diversification Opportunities for Keurig Dr and Caldas Gold

-0.21

Correlation Coefficient

Keurig Dr  Caldas Gold

Very good diversification

The 3 months correlation between Keurig and Caldas is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Caldas Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldas Gold 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 Caldas Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldas Gold has no effect on the direction of Keurig Dr i.e., Keurig Dr and Caldas Gold go up and down completely randomly.

Pair Corralation between Keurig Dr and Caldas Gold

Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Caldas Gold. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 241.7 times less risky than Caldas Gold. The stock trades about -0.01 of its potential returns per unit of risk. The Caldas Gold is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  32.00  in Caldas Gold on October 10, 2024 and sell it today you would lose (14.00) from holding Caldas Gold or give up 43.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.66%
Values	Daily Returns

Keurig Dr Pepper  vs.  Caldas Gold

Keurig Dr Pepper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keurig Dr Pepper has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Caldas Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Caldas Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Caldas Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Keurig Dr and Caldas Gold

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

The idea behind Keurig Dr Pepper and Caldas Gold 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 CEOs Directory module to screen CEOs from public companies around the world.