Correlation Between Keurig Dr and OFAL

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

Diversification Opportunities for Keurig Dr and OFAL

0.54

Correlation Coefficient

Keurig Dr  OFAL

Very weak diversification

The 3 months correlation between Keurig and OFAL is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and OFAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFAL 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 OFAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFAL has no effect on the direction of Keurig Dr i.e., Keurig Dr and OFAL go up and down completely randomly.

Pair Corralation between Keurig Dr and OFAL

Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the OFAL. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 4.86 times less risky than OFAL. The stock trades about -0.18 of its potential returns per unit of risk. The OFAL is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  197.00  in OFAL on July 7, 2025 and sell it today you would lose (82.00) from holding OFAL or give up 41.62% of portfolio value over 90 days.

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

Keurig Dr Pepper  vs.  OFAL

Keurig Dr Pepper

Risk-Adjusted Performance

Weakest

Over the last 90 days Keurig Dr Pepper has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in November 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

OFAL

Risk-Adjusted Performance

Weakest

Over the last 90 days OFAL 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 November 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 OFAL

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

The idea behind Keurig Dr Pepper and OFAL 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.