Correlation Between Keurig Dr and Under Armour

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

Diversification Opportunities for Keurig Dr and Under Armour

0.09

Correlation Coefficient

Keurig Dr  Under Armour

Significant diversification

The 3 months correlation between Keurig and Under is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour C has no effect on the direction of Keurig Dr i.e., Keurig Dr and Under Armour go up and down completely randomly.

Pair Corralation between Keurig Dr and Under Armour

Considering the 90-day investment horizon Keurig Dr Pepper is expected to generate 0.74 times more return on investment than Under Armour. However, Keurig Dr Pepper is 1.35 times less risky than Under Armour. It trades about 0.11 of its potential returns per unit of risk. Under Armour C is currently generating about -0.16 per unit of risk. If you would invest  3,153  in Keurig Dr Pepper on December 3, 2024 and sell it today you would earn a total of  199.00  from holding Keurig Dr Pepper or generate 6.31% 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.  Under Armour C

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.

Under Armour C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Under Armour C has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Keurig Dr and Under Armour

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

The idea behind Keurig Dr Pepper and Under Armour C 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.