Correlation Between Keurig Dr and Zapata Computing

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

Diversification Opportunities for Keurig Dr and Zapata Computing

-0.06

Correlation Coefficient

Keurig Dr  Zapata Computing

Good diversification

The 3 months correlation between Keurig and Zapata is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Zapata Computing Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapata Computing Holdings 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 Zapata Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapata Computing Holdings has no effect on the direction of Keurig Dr i.e., Keurig Dr and Zapata Computing go up and down completely randomly.

Pair Corralation between Keurig Dr and Zapata Computing

If you would invest  0.56  in Zapata Computing Holdings on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Zapata Computing Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	2.44%
Values	Daily Returns

Keurig Dr Pepper  vs.  Zapata Computing Holdings

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.

Zapata Computing Holdings

Risk-Adjusted Performance

0 of 100

Good

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

Pair Trading with Keurig Dr and Zapata Computing

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

The idea behind Keurig Dr Pepper and Zapata Computing Holdings 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.