Correlation Between Powered Brands and Keurig Dr

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

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

Diversification Opportunities for Powered Brands and Keurig Dr

0.0

Correlation Coefficient

Powered Brands  Keurig Dr

Pay attention - limited upside

The 3 months correlation between Powered and Keurig is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Powered Brands 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 Powered Brands 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 Powered Brands 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 Powered Brands i.e., Powered Brands and Keurig Dr go up and down completely randomly.

Pair Corralation between Powered Brands and Keurig Dr

If you would invest  3,204  in Keurig Dr Pepper on December 27, 2024 and sell it today you would earn a total of  221.00  from holding Keurig Dr Pepper or generate 6.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Powered Brands  vs.  Keurig Dr Pepper

Powered Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Powered Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Powered Brands is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Keurig Dr Pepper

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Keurig Dr Pepper are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental indicators, Keurig Dr may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Powered Brands and Keurig Dr

The main advantage of trading using opposite Powered Brands and Keurig Dr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powered Brands 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 Powered Brands 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.