Correlation Between Aurubis AG and PepsiCo
Can any of the company-specific risk be diversified away by investing in both Aurubis AG 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 Aurubis AG and PepsiCo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurubis AG and PepsiCo, you can compare the effects of market volatilities on Aurubis AG 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 Aurubis AG with a short position of PepsiCo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurubis AG and PepsiCo.
Diversification Opportunities for Aurubis AG and PepsiCo
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aurubis and PepsiCo is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aurubis AG and PepsiCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepsiCo and Aurubis AG 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 Aurubis AG 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 Aurubis AG i.e., Aurubis AG and PepsiCo go up and down completely randomly.
Pair Corralation between Aurubis AG and PepsiCo
Assuming the 90 days trading horizon Aurubis AG is expected to under-perform the PepsiCo. In addition to that, Aurubis AG is 2.24 times more volatile than PepsiCo. It trades about 0.0 of its total potential returns per unit of risk. PepsiCo is currently generating about 0.0 per unit of volatility. If you would invest 14,965 in PepsiCo on September 28, 2024 and sell it today you would lose (497.00) from holding PepsiCo or give up 3.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurubis AG vs. PepsiCo
Performance |
| Timeline |
| Aurubis AG |
| PepsiCo |
Aurubis AG and PepsiCo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurubis AG and PepsiCo
The main advantage of trading using opposite Aurubis AG and PepsiCo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurubis AG 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.| Aurubis AG vs. Constellation Software | Aurubis AG vs. Take Two Interactive Software | Aurubis AG vs. GAMESTOP | Aurubis AG vs. UPDATE SOFTWARE |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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