Correlation Between Keurig and Weyco

Can any of the company-specific risk be diversified away by investing in both Keurig and Weyco 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 and Weyco 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 Weyco Group, you can compare the effects of market volatilities on Keurig and Weyco 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 with a short position of Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig and Weyco.

Diversification Opportunities for Keurig and Weyco

-0.02

Correlation Coefficient

Keurig  Weyco

Good diversification

The 3 months correlation between Keurig and Weyco is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Keurig 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Keurig i.e., Keurig and Weyco go up and down completely randomly.

Pair Corralation between Keurig and Weyco

Assuming the 90 days trading horizon Keurig Dr Pepper is expected to generate 0.05 times more return on investment than Weyco. However, Keurig Dr Pepper is 20.51 times less risky than Weyco. It trades about 0.04 of its potential returns per unit of risk. Weyco Group is currently generating about -0.06 per unit of risk. If you would invest  9,978  in Keurig Dr Pepper on December 4, 2024 and sell it today you would earn a total of  7.00  from holding Keurig Dr Pepper or generate 0.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Keurig Dr Pepper  vs.  Weyco Group

Keurig Dr Pepper

Risk-Adjusted Performance

Very Weak

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

Weyco Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Weyco Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Weyco is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Keurig and Weyco

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

The idea behind Keurig Dr Pepper and Weyco Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.