Correlation Between Keurig Dr and Eurobank Ergasias

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

Diversification Opportunities for Keurig Dr and Eurobank Ergasias

-0.17

Correlation Coefficient

Keurig Dr  Eurobank Ergasias

Good diversification

The 3 months correlation between Keurig and Eurobank is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias 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 Eurobank Ergasias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurobank Ergasias has no effect on the direction of Keurig Dr i.e., Keurig Dr and Eurobank Ergasias go up and down completely randomly.

Pair Corralation between Keurig Dr and Eurobank Ergasias

Considering the 90-day investment horizon Keurig Dr is expected to generate 2.99 times less return on investment than Eurobank Ergasias. But when comparing it to its historical volatility, Keurig Dr Pepper is 1.71 times less risky than Eurobank Ergasias. It trades about 0.06 of its potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  224.00  in Eurobank Ergasias Services on December 20, 2024 and sell it today you would earn a total of  22.00  from holding Eurobank Ergasias Services or generate 9.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.67%
Values	Daily Returns

Keurig Dr Pepper  vs.  Eurobank Ergasias Services

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.

Eurobank Ergasias

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Eurobank Ergasias reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Keurig Dr and Eurobank Ergasias

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

The idea behind Keurig Dr Pepper and Eurobank Ergasias Services 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.