Correlation Between Keurig Dr and Supercom

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

Diversification Opportunities for Keurig Dr and Supercom

0.02

Correlation Coefficient

Keurig Dr  Supercom

Significant diversification

The 3 months correlation between Keurig and Supercom is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom 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 Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of Keurig Dr i.e., Keurig Dr and Supercom go up and down completely randomly.

Pair Corralation between Keurig Dr and Supercom

Considering the 90-day investment horizon Keurig Dr Pepper is expected to generate 0.43 times more return on investment than Supercom. However, Keurig Dr Pepper is 2.34 times less risky than Supercom. It trades about 0.02 of its potential returns per unit of risk. Supercom is currently generating about -0.15 per unit of risk. If you would invest  3,320  in Keurig Dr Pepper on September 12, 2024 and sell it today you would earn a total of  11.50  from holding Keurig Dr Pepper or generate 0.35% 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.  Supercom

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.

Supercom

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Supercom are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental indicators, Supercom sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Keurig Dr and Supercom

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

The idea behind Keurig Dr Pepper and Supercom 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.