Correlation Between Live Ventures and PepsiCo
Can any of the company-specific risk be diversified away by investing in both Live Ventures 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 Live Ventures and PepsiCo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Ventures and PepsiCo, you can compare the effects of market volatilities on Live Ventures 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 Live Ventures with a short position of PepsiCo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Ventures and PepsiCo.
Diversification Opportunities for Live Ventures and PepsiCo
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Live and PepsiCo is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and PepsiCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepsiCo and Live Ventures 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 Live Ventures 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 Live Ventures i.e., Live Ventures and PepsiCo go up and down completely randomly.
Pair Corralation between Live Ventures and PepsiCo
Given the investment horizon of 90 days Live Ventures is expected to generate 1.69 times more return on investment than PepsiCo. However, Live Ventures is 1.69 times more volatile than PepsiCo. It trades about 0.04 of its potential returns per unit of risk. PepsiCo is currently generating about 0.05 per unit of risk. If you would invest 932.00 in Live Ventures on November 2, 2024 and sell it today you would earn a total of 12.00 from holding Live Ventures or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Ventures vs. PepsiCo
Performance |
| Timeline |
| Live Ventures |
| PepsiCo |
Live Ventures and PepsiCo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Ventures and PepsiCo
The main advantage of trading using opposite Live Ventures and PepsiCo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Ventures 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.| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Kingfisher plc | Live Ventures vs. Haverty Furniture Companies |
| PepsiCo vs. Coca Cola Consolidated | PepsiCo vs. Monster Beverage Corp | PepsiCo vs. Celsius Holdings | PepsiCo vs. Keurig Dr Pepper |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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