Correlation Between Keurig Dr and Sharplink Gaming

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

Diversification Opportunities for Keurig Dr and Sharplink Gaming

-0.88

Correlation Coefficient

Keurig Dr  Sharplink Gaming

Pay attention - limited upside

The 3 months correlation between Keurig and Sharplink is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Sharplink Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharplink Gaming 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 Sharplink Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharplink Gaming has no effect on the direction of Keurig Dr i.e., Keurig Dr and Sharplink Gaming go up and down completely randomly.

Pair Corralation between Keurig Dr and Sharplink Gaming

Considering the 90-day investment horizon Keurig Dr Pepper is expected to generate 0.21 times more return on investment than Sharplink Gaming. However, Keurig Dr Pepper is 4.67 times less risky than Sharplink Gaming. It trades about 0.05 of its potential returns per unit of risk. Sharplink Gaming is currently generating about -0.03 per unit of risk. If you would invest  3,211  in Keurig Dr Pepper on February 23, 2024 and sell it today you would earn a total of  216.00  from holding Keurig Dr Pepper or generate 6.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Keurig Dr Pepper  vs.  Sharplink Gaming

Keurig Dr Pepper

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Keurig Dr Pepper are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental indicators, Keurig Dr reported solid returns over the last few months and may actually be approaching a breakup point.

Sharplink Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharplink Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Keurig Dr and Sharplink Gaming

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

The idea behind Keurig Dr Pepper and Sharplink Gaming 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.