Correlation Between Keurig Dr and Duckhorn Portfolio

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

Diversification Opportunities for Keurig Dr and Duckhorn Portfolio

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between Keurig and Duckhorn is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Duckhorn Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duckhorn Portfolio 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 Duckhorn Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duckhorn Portfolio has no effect on the direction of Keurig Dr i.e., Keurig Dr and Duckhorn Portfolio go up and down completely randomly.

Pair Corralation between Keurig Dr and Duckhorn Portfolio

Considering the 90-day investment horizon Keurig Dr Pepper is expected to generate 0.55 times more return on investment than Duckhorn Portfolio. However, Keurig Dr Pepper is 1.82 times less risky than Duckhorn Portfolio. It trades about -0.02 of its potential returns per unit of risk. Duckhorn Portfolio is currently generating about -0.05 per unit of risk. If you would invest  3,579  in Keurig Dr Pepper on December 30, 2023 and sell it today you would lose (512.00) from holding Keurig Dr Pepper or give up 14.31% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Keurig Dr Pepper  vs.  Duckhorn Portfolio

 Performance 
       Timeline  
Keurig Dr Pepper 

Risk-Adjusted Performance

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Low
 
High
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 unsteady 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.
Duckhorn Portfolio 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Duckhorn Portfolio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Keurig Dr and Duckhorn Portfolio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Keurig Dr and Duckhorn Portfolio

The main advantage of trading using opposite Keurig Dr and Duckhorn Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, Duckhorn Portfolio 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 Duckhorn Portfolio will offset losses from the drop in Duckhorn Portfolio's long position.
The idea behind Keurig Dr Pepper and Duckhorn Portfolio 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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