Correlation Between Keurig Dr and Global Ship

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

Diversification Opportunities for Keurig Dr and Global Ship

0.15

Correlation Coefficient

Keurig Dr  Global Ship

Average diversification

The 3 months correlation between Keurig and Global is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease 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 Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of Keurig Dr i.e., Keurig Dr and Global Ship go up and down completely randomly.

Pair Corralation between Keurig Dr and Global Ship

Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Global Ship. In addition to that, Keurig Dr is 1.09 times more volatile than Global Ship Lease. It trades about -0.58 of its total potential returns per unit of risk. Global Ship Lease is currently generating about -0.04 per unit of volatility. If you would invest  2,606  in Global Ship Lease on October 13, 2024 and sell it today you would lose (18.00) from holding Global Ship Lease or give up 0.69% of portfolio value over 90 days.

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

Keurig Dr Pepper  vs.  Global Ship Lease

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.

Global Ship Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Ship Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Global Ship is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Keurig Dr and Global Ship

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

The idea behind Keurig Dr Pepper and Global Ship Lease 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.