Correlation Between DigiAsia Corp and PepsiCo
Can any of the company-specific risk be diversified away by investing in both DigiAsia Corp 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 DigiAsia Corp and PepsiCo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DigiAsia Corp and PepsiCo, you can compare the effects of market volatilities on DigiAsia Corp 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 DigiAsia Corp with a short position of PepsiCo. Check out your portfolio center. Please also check ongoing floating volatility patterns of DigiAsia Corp and PepsiCo.
Diversification Opportunities for DigiAsia Corp and PepsiCo
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DigiAsia and PepsiCo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding DigiAsia Corp and PepsiCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepsiCo and DigiAsia Corp 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 DigiAsia Corp 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 DigiAsia Corp i.e., DigiAsia Corp and PepsiCo go up and down completely randomly.
Pair Corralation between DigiAsia Corp and PepsiCo
Given the investment horizon of 90 days DigiAsia Corp is expected to under-perform the PepsiCo. In addition to that, DigiAsia Corp is 11.31 times more volatile than PepsiCo. It trades about -0.05 of its total potential returns per unit of risk. PepsiCo is currently generating about -0.03 per unit of volatility. If you would invest 16,613 in PepsiCo on November 3, 2024 and sell it today you would lose (1,544) from holding PepsiCo or give up 9.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.48% |
| Values | Daily Returns |
DigiAsia Corp vs. PepsiCo
Performance |
| Timeline |
| DigiAsia Corp |
| PepsiCo |
DigiAsia Corp and PepsiCo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DigiAsia Corp and PepsiCo
The main advantage of trading using opposite DigiAsia Corp and PepsiCo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DigiAsia Corp 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.| DigiAsia Corp vs. Udemy Inc | DigiAsia Corp vs. Cheche Group Class | DigiAsia Corp vs. Arrow Electronics | DigiAsia Corp vs. GMO Internet |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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