Correlation Between Keurig Dr and Westrock Coffee

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

Diversification Opportunities for Keurig Dr and Westrock Coffee

-0.25

Correlation Coefficient

Keurig Dr  Westrock Coffee

Very good diversification

The 3 months correlation between Keurig and Westrock is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee 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 Westrock Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westrock Coffee has no effect on the direction of Keurig Dr i.e., Keurig Dr and Westrock Coffee go up and down completely randomly.

Pair Corralation between Keurig Dr and Westrock Coffee

Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Westrock Coffee. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 2.94 times less risky than Westrock Coffee. The stock trades about -0.02 of its potential returns per unit of risk. The Westrock Coffee is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  603.00  in Westrock Coffee on May 6, 2025 and sell it today you would earn a total of  51.00  from holding Westrock Coffee or generate 8.46% return on investment over 90 days.

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

Keurig Dr Pepper  vs.  Westrock Coffee

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.

Westrock Coffee

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Westrock Coffee are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Westrock Coffee may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Keurig Dr and Westrock Coffee

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

The idea behind Keurig Dr Pepper and Westrock Coffee 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.