Correlation Between Keurig Dr and Intelligent Bio

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

Diversification Opportunities for Keurig Dr and Intelligent Bio

-0.2

Correlation Coefficient

Keurig Dr  Intelligent Bio

Good diversification

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

Pair Corralation between Keurig Dr and Intelligent Bio

Considering the 90-day investment horizon Keurig Dr is expected to generate 4.71 times less return on investment than Intelligent Bio. But when comparing it to its historical volatility, Keurig Dr Pepper is 10.79 times less risky than Intelligent Bio. It trades about 0.02 of its potential returns per unit of risk. Intelligent Bio Solutions is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,076  in Intelligent Bio Solutions on May 2, 2025 and sell it today you would lose (1,921) from holding Intelligent Bio Solutions or give up 92.53% of portfolio value over 90 days.

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

Keurig Dr Pepper  vs.  Intelligent Bio Solutions

Keurig Dr Pepper

Risk-Adjusted Performance

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 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.

Intelligent Bio Solutions

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intelligent Bio Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Intelligent Bio unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Keurig Dr and Intelligent Bio

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

The idea behind Keurig Dr Pepper and Intelligent Bio Solutions 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.