diversifiable risk of combining Keurig Dr and Fevertree Drinks 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 Fevertree Drinks Plc, you can compare the effects of market volatilities on Keurig Dr and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Fevertree Drinks.
Diversification Opportunities for Keurig Dr and Fevertree Drinks
Pair Corralation between Keurig Dr and Fevertree Drinks
Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Fevertree Drinks. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 2.37 times less risky than Fevertree Drinks. The stock trades about -0.01 of its potential returns per unit of risk. The Fevertree Drinks Plc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,253 in Fevertree Drinks Plc on November 24, 2023 and sell it today you would earn a total of 57.00 from holding Fevertree Drinks Plc or generate 4.55% return on investment over 90 days.
Keurig Dr Pepper vs. Fevertree Drinks Plc
Keurig Dr and Fevertree Drinks Volatility Contrast
Pair Trading with Keurig Dr and Fevertree DrinksThe main advantage of trading using opposite Keurig Dr and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position. The idea behind Keurig Dr Pepper and Fevertree Drinks Plc 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.
Check out your portfolio center.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Use Commodity Channel Index to analyze current equity momentum
Quick portfolio dashboard that showcases your latest portfolios
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
|My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Portfolio dashboard that provides centralized access to all your investments
|Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Track or share privately all of your investments from the convenience of any device
Check real value of public entities based on technical and fundamental data
|Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Find actively traded Exchange Traded Funds (ETF) in USA