Correlation Between Starbucks and Dutch Bros

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

By analyzing existing cross correlation between Starbucks and Dutch Bros, you can compare the effects of market volatilities on Starbucks and Dutch Bros 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 Starbucks with a short position of Dutch Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starbucks and Dutch Bros.

Diversification Opportunities for Starbucks and Dutch Bros

0.0

Correlation Coefficient

Starbucks  Dutch Bros

Pay attention - limited upside

The 3 months correlation between Starbucks and Dutch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Starbucks and Dutch Bros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dutch Bros and Starbucks 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 Starbucks are associated (or correlated) with Dutch Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dutch Bros has no effect on the direction of Starbucks i.e., Starbucks and Dutch Bros go up and down completely randomly.

Pair Corralation between Starbucks and Dutch Bros

Given the investment horizon of 90 days Starbucks is expected to generate 0.61 times more return on investment than Dutch Bros. However, Starbucks is 1.63 times less risky than Dutch Bros. It trades about 0.06 of its potential returns per unit of risk. Dutch Bros is currently generating about 0.0 per unit of risk. If you would invest  8,220  in Starbucks on May 6, 2025 and sell it today you would earn a total of  466.00  from holding Starbucks or generate 5.67% return on investment over 90 days.

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

Starbucks  vs.  Dutch Bros

Starbucks

Risk-Adjusted Performance

Insignificant

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

Dutch Bros

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dutch Bros has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Dutch Bros is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Starbucks and Dutch Bros

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

The idea behind Starbucks and Dutch Bros 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.