Correlation Between Lion One and Keurig Dr

Can any of the company-specific risk be diversified away by investing in both Lion One and Keurig Dr 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 Lion One and Keurig Dr into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lion One Metals and Keurig Dr Pepper, you can compare the effects of market volatilities on Lion One and Keurig Dr 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 Lion One with a short position of Keurig Dr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Keurig Dr.

Diversification Opportunities for Lion One and Keurig Dr

0.59

Correlation Coefficient

Lion One  Keurig Dr

Very weak diversification

The 3 months correlation between Lion and Keurig is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Keurig Dr Pepper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keurig Dr Pepper and Lion One 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 Lion One Metals are associated (or correlated) with Keurig Dr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keurig Dr Pepper has no effect on the direction of Lion One i.e., Lion One and Keurig Dr go up and down completely randomly.

Pair Corralation between Lion One and Keurig Dr

Assuming the 90 days horizon Lion One Metals is expected to under-perform the Keurig Dr. In addition to that, Lion One is 2.37 times more volatile than Keurig Dr Pepper. It trades about -0.19 of its total potential returns per unit of risk. Keurig Dr Pepper is currently generating about 0.02 per unit of volatility. 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	Weak
Accuracy	95.45%
Values	Daily Returns

Lion One Metals  vs.  Keurig Dr Pepper

Lion One Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lion One Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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.

Pair Trading with Lion One and Keurig Dr

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

The idea behind Lion One Metals and Keurig Dr Pepper 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..