Correlation Between Keurig Dr and Dalata Hotel

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

Diversification Opportunities for Keurig Dr and Dalata Hotel

0.0

Correlation Coefficient

Keurig Dr  Dalata Hotel

Pay attention - limited upside

The 3 months correlation between Keurig and Dalata is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group 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 Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Keurig Dr i.e., Keurig Dr and Dalata Hotel go up and down completely randomly.

Pair Corralation between Keurig Dr and Dalata Hotel

Considering the 90-day investment horizon Keurig Dr is expected to generate 6.88 times less return on investment than Dalata Hotel. But when comparing it to its historical volatility, Keurig Dr Pepper is 2.04 times less risky than Dalata Hotel. It trades about 0.02 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  336.00  in Dalata Hotel Group on December 2, 2024 and sell it today you would earn a total of  152.00  from holding Dalata Hotel Group or generate 45.24% return on investment over 90 days.

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

Keurig Dr Pepper  vs.  Dalata Hotel Group

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.

Dalata Hotel Group

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Keurig Dr and Dalata Hotel

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

The idea behind Keurig Dr Pepper and Dalata Hotel Group 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.