Correlation Between GRUPO ECOENER and PepsiCo
Can any of the company-specific risk be diversified away by investing in both GRUPO ECOENER and PepsiCo 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 GRUPO ECOENER and PepsiCo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRUPO ECOENER EO and PepsiCo, you can compare the effects of market volatilities on GRUPO ECOENER and PepsiCo 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 GRUPO ECOENER with a short position of PepsiCo. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO ECOENER and PepsiCo.
Diversification Opportunities for GRUPO ECOENER and PepsiCo
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GRUPO and PepsiCo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO ECOENER EO and PepsiCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepsiCo and GRUPO ECOENER 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 GRUPO ECOENER EO are associated (or correlated) with PepsiCo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PepsiCo has no effect on the direction of GRUPO ECOENER i.e., GRUPO ECOENER and PepsiCo go up and down completely randomly.
Pair Corralation between GRUPO ECOENER and PepsiCo
Assuming the 90 days horizon GRUPO ECOENER EO is expected to generate 3.07 times more return on investment than PepsiCo. However, GRUPO ECOENER is 3.07 times more volatile than PepsiCo. It trades about 0.03 of its potential returns per unit of risk. PepsiCo is currently generating about -0.01 per unit of risk. If you would invest 369.00 in GRUPO ECOENER EO on September 28, 2024 and sell it today you would earn a total of 64.00 from holding GRUPO ECOENER EO or generate 17.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRUPO ECOENER EO vs. PepsiCo
Performance |
| Timeline |
| GRUPO ECOENER EO |
| PepsiCo |
GRUPO ECOENER and PepsiCo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRUPO ECOENER and PepsiCo
The main advantage of trading using opposite GRUPO ECOENER and PepsiCo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPO ECOENER position performs unexpectedly, PepsiCo 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 PepsiCo will offset losses from the drop in PepsiCo's long position.| GRUPO ECOENER vs. Apple Inc | GRUPO ECOENER vs. Apple Inc | GRUPO ECOENER vs. Apple Inc | GRUPO ECOENER vs. Apple Inc |
| PepsiCo vs. THAI BEVERAGE | PepsiCo vs. AM EAGLE OUTFITTERS | PepsiCo vs. SENECA FOODS A | PepsiCo vs. TYSON FOODS A |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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