Correlation Between Keurig Dr and DIGITAL

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

Diversification Opportunities for Keurig Dr and DIGITAL

0.0

Correlation Coefficient

Keurig Dr  DIGITAL

Pay attention - limited upside

The 3 months correlation between Keurig and DIGITAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and DIGITAL REALTY TRUST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL REALTY TRUST 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 DIGITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL REALTY TRUST has no effect on the direction of Keurig Dr i.e., Keurig Dr and DIGITAL go up and down completely randomly.

Pair Corralation between Keurig Dr and DIGITAL

If you would invest  0.00  in DIGITAL REALTY TRUST on October 10, 2024 and sell it today you would earn a total of  0.00  from holding DIGITAL REALTY TRUST or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Keurig Dr Pepper  vs.  DIGITAL REALTY TRUST

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.

DIGITAL REALTY TRUST

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DIGITAL REALTY TRUST has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, DIGITAL 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 DIGITAL

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

The idea behind Keurig Dr Pepper and DIGITAL REALTY TRUST 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.