Correlation Between Duckhorn Portfolio and Keurig Dr

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

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

Diversification Opportunities for Duckhorn Portfolio and Keurig Dr

-0.36

Correlation Coefficient

Duckhorn Portfolio  Keurig Dr

Very good diversification

The 3 months correlation between Duckhorn and Keurig is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Duckhorn Portfolio 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 Duckhorn Portfolio 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 Duckhorn Portfolio 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 Duckhorn Portfolio i.e., Duckhorn Portfolio and Keurig Dr go up and down completely randomly.

Pair Corralation between Duckhorn Portfolio and Keurig Dr

Given the investment horizon of 90 days Duckhorn Portfolio is expected to under-perform the Keurig Dr. In addition to that, Duckhorn Portfolio is 2.0 times more volatile than Keurig Dr Pepper. It trades about -0.15 of its total potential returns per unit of risk. Keurig Dr Pepper is currently generating about 0.25 per unit of volatility. If you would invest  3,073  in Keurig Dr Pepper on January 26, 2024 and sell it today you would earn a total of  161.00  from holding Keurig Dr Pepper or generate 5.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Duckhorn Portfolio  vs.  Keurig Dr Pepper

Duckhorn Portfolio

Risk-Adjusted Performance

0 of 100

Very Weak

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

Keurig Dr Pepper

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Keurig Dr Pepper are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Keurig Dr is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Duckhorn Portfolio and Keurig Dr

The main advantage of trading using opposite Duckhorn Portfolio and Keurig Dr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duckhorn Portfolio 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 Duckhorn Portfolio 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.