Correlation Between DAX Index and PepsiCo
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By analyzing existing cross correlation between DAX Index and PepsiCo, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of PepsiCo. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and PepsiCo.
Diversification Opportunities for DAX Index and PepsiCo
Very good diversification
The 3 months correlation between DAX and PepsiCo is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and PepsiCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepsiCo and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and PepsiCo go up and down completely randomly.
Pair Corralation between DAX Index and PepsiCo
Assuming the 90 days trading horizon DAX Index is expected to generate 0.52 times more return on investment than PepsiCo. However, DAX Index is 1.91 times less risky than PepsiCo. It trades about -0.08 of its potential returns per unit of risk. PepsiCo is currently generating about -0.3 per unit of risk. If you would invest 2,031,381 in DAX Index on October 16, 2024 and sell it today you would lose (18,096) from holding DAX Index or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. PepsiCo
Performance |
| Timeline |
DAX Index and PepsiCo Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
PepsiCo
Pair trading matchups for PepsiCo
Pair Trading with DAX Index and PepsiCo
The main advantage of trading using opposite DAX Index and PepsiCo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. LIFEWAY FOODS | DAX Index vs. Tyson Foods | DAX Index vs. Lifeway Foods | DAX Index vs. MOLSON RS BEVERAGE |
| PepsiCo vs. Aluminum of | PepsiCo vs. BANKINTER ADR 2007 | PepsiCo vs. Nippon Light Metal | PepsiCo vs. Forsys Metals Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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