Correlation Between PepsiCo and Uni President
Can any of the company-specific risk be diversified away by investing in both PepsiCo and Uni President 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 PepsiCo and Uni President into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PepsiCo and Uni President China Holdings, you can compare the effects of market volatilities on PepsiCo and Uni President 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 PepsiCo with a short position of Uni President. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepsiCo and Uni President.
Diversification Opportunities for PepsiCo and Uni President
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between PepsiCo and Uni is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and Uni President China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uni President China and PepsiCo 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 PepsiCo are associated (or correlated) with Uni President. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uni President China has no effect on the direction of PepsiCo i.e., PepsiCo and Uni President go up and down completely randomly.
Pair Corralation between PepsiCo and Uni President
Assuming the 90 days horizon PepsiCo is expected to under-perform the Uni President. But the stock apears to be less risky and, when comparing its historical volatility, PepsiCo is 4.44 times less risky than Uni President. The stock trades about -0.02 of its potential returns per unit of risk. The Uni President China Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 77.00 in Uni President China Holdings on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Uni President China Holdings or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PepsiCo vs. Uni President China Holdings
Performance |
| Timeline |
| PepsiCo |
| Uni President China |
PepsiCo and Uni President Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepsiCo and Uni President
The main advantage of trading using opposite PepsiCo and Uni President positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepsiCo position performs unexpectedly, Uni President 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 Uni President will offset losses from the drop in Uni President's long position.| PepsiCo vs. Live Nation Entertainment | PepsiCo vs. COSTCO WHOLESALE CDR | PepsiCo vs. PLAYSTUDIOS A DL 0001 | PepsiCo vs. Fast Retailing Co |
| Uni President vs. JJ SNACK FOODS | Uni President vs. Public Storage | Uni President vs. PREMIER FOODS | Uni President vs. Collins Foods Limited |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |