Correlation Between Keurig Dr and Konica Minolta

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

Diversification Opportunities for Keurig Dr and Konica Minolta

0.13

Correlation Coefficient

Keurig Dr  Konica Minolta

Average diversification

The 3 months correlation between Keurig and Konica is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Konica Minolta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konica Minolta 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 Konica Minolta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konica Minolta has no effect on the direction of Keurig Dr i.e., Keurig Dr and Konica Minolta go up and down completely randomly.

Pair Corralation between Keurig Dr and Konica Minolta

Considering the 90-day investment horizon Keurig Dr Pepper is expected to generate 6.09 times more return on investment than Konica Minolta. However, Keurig Dr is 6.09 times more volatile than Konica Minolta. It trades about 0.07 of its potential returns per unit of risk. Konica Minolta is currently generating about -0.21 per unit of risk. If you would invest  3,254  in Keurig Dr Pepper on December 5, 2024 and sell it today you would earn a total of  76.00  from holding Keurig Dr Pepper or generate 2.34% return on investment over 90 days.

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

Keurig Dr Pepper  vs.  Konica Minolta

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 2 (%) 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.

Konica Minolta

Risk-Adjusted Performance

Very Weak

Over the last 90 days Konica Minolta has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Keurig Dr and Konica Minolta

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

The idea behind Keurig Dr Pepper and Konica Minolta 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.