Correlation Between Signet International and Keurig Dr

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

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

Diversification Opportunities for Signet International and Keurig Dr

0.0

Correlation Coefficient

Signet International  Keurig Dr

Pay attention - limited upside

The 3 months correlation between Signet and Keurig is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Signet International Holdings 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 Signet International 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 Signet International Holdings 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 Signet International i.e., Signet International and Keurig Dr go up and down completely randomly.

Pair Corralation between Signet International and Keurig Dr

Given the investment horizon of 90 days Signet International Holdings is expected to generate 44.64 times more return on investment than Keurig Dr. However, Signet International is 44.64 times more volatile than Keurig Dr Pepper. It trades about 0.1 of its potential returns per unit of risk. Keurig Dr Pepper is currently generating about 0.01 per unit of risk. If you would invest  25.00  in Signet International Holdings on February 9, 2024 and sell it today you would earn a total of  2.00  from holding Signet International Holdings or generate 8.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Signet International Holdings  vs.  Keurig Dr Pepper

Signet International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Signet International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Signet International is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Keurig Dr Pepper

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Keurig Dr Pepper are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, Keurig Dr may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Signet International and Keurig Dr

The main advantage of trading using opposite Signet International and Keurig Dr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Signet International 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 Signet International Holdings 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.