Correlation Between Keurig Dr and MARTIN

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

Diversification Opportunities for Keurig Dr and MARTIN

0.55

Correlation Coefficient

Keurig Dr  MARTIN

Very weak diversification

The 3 months correlation between Keurig and MARTIN is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and MARTIN MARIETTA MATLS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARTIN MARIETTA MATLS 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 MARTIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARTIN MARIETTA MATLS has no effect on the direction of Keurig Dr i.e., Keurig Dr and MARTIN go up and down completely randomly.

Pair Corralation between Keurig Dr and MARTIN

Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the MARTIN. In addition to that, Keurig Dr is 3.53 times more volatile than MARTIN MARIETTA MATLS. It trades about -0.05 of its total potential returns per unit of risk. MARTIN MARIETTA MATLS is currently generating about -0.04 per unit of volatility. If you would invest  9,691  in MARTIN MARIETTA MATLS on October 6, 2024 and sell it today you would lose (31.00) from holding MARTIN MARIETTA MATLS or give up 0.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	60.98%
Values	Daily Returns

Keurig Dr Pepper  vs.  MARTIN MARIETTA MATLS

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.

MARTIN MARIETTA MATLS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARTIN MARIETTA MATLS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MARTIN is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Keurig Dr and MARTIN

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

The idea behind Keurig Dr Pepper and MARTIN MARIETTA MATLS 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.

Check out your portfolio center.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.