Correlation Between Keurig Dr and Delta Air

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

Diversification Opportunities for Keurig Dr and Delta Air

-0.67

Correlation Coefficient

Keurig Dr  Delta Air

Excellent diversification

The 3 months correlation between Keurig and Delta is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Keurig Dr i.e., Keurig Dr and Delta Air go up and down completely randomly.

Pair Corralation between Keurig Dr and Delta Air

Considering the 90-day investment horizon Keurig Dr is expected to generate 1.56 times less return on investment than Delta Air. But when comparing it to its historical volatility, Keurig Dr Pepper is 2.43 times less risky than Delta Air. It trades about 0.05 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4,480  in Delta Air Lines on February 17, 2025 and sell it today you would earn a total of  612.00  from holding Delta Air Lines or generate 13.66% return on investment over 90 days.

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

Keurig Dr Pepper  vs.  Delta Air Lines

Keurig Dr Pepper

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Keurig Dr Pepper are ranked lower than 4 (%) 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 newest stock price agitation, may contribute to short-term losses for the retail investors.

Delta Air Lines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delta Air Lines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in June 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Keurig Dr and Delta Air

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

The idea behind Keurig Dr Pepper and Delta Air Lines 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.