Correlation Between Keurig Dr and SAIHEAT

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

Diversification Opportunities for Keurig Dr and SAIHEAT

-0.36

Correlation Coefficient

Keurig Dr  SAIHEAT

Very good diversification

The 3 months correlation between Keurig and SAIHEAT is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited 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 SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of Keurig Dr i.e., Keurig Dr and SAIHEAT go up and down completely randomly.

Pair Corralation between Keurig Dr and SAIHEAT

Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the SAIHEAT. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 10.23 times less risky than SAIHEAT. The stock trades about -0.39 of its potential returns per unit of risk. The SAIHEAT Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  9.50  in SAIHEAT Limited on October 8, 2024 and sell it today you would earn a total of  0.32  from holding SAIHEAT Limited or generate 3.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.37%
Values	Daily Returns

Keurig Dr Pepper  vs.  SAIHEAT Limited

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 latest inconsistent performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

SAIHEAT Limited

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days SAIHEAT Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly inconsistent technical indicators, SAIHEAT showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Keurig Dr and SAIHEAT

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

The idea behind Keurig Dr Pepper and SAIHEAT Limited 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.