Correlation Between PepsiCo and Aegon Funding
Can any of the company-specific risk be diversified away by investing in both PepsiCo and Aegon Funding 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 Aegon Funding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PepsiCo and Aegon Funding, you can compare the effects of market volatilities on PepsiCo and Aegon Funding 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 Aegon Funding. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepsiCo and Aegon Funding.
Diversification Opportunities for PepsiCo and Aegon Funding
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PepsiCo and Aegon is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and Aegon Funding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon Funding 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 Aegon Funding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon Funding has no effect on the direction of PepsiCo i.e., PepsiCo and Aegon Funding go up and down completely randomly.
Pair Corralation between PepsiCo and Aegon Funding
Considering the 90-day investment horizon PepsiCo is expected to under-perform the Aegon Funding. In addition to that, PepsiCo is 1.28 times more volatile than Aegon Funding. It trades about 0.0 of its total potential returns per unit of risk. Aegon Funding is currently generating about 0.03 per unit of volatility. If you would invest 2,009 in Aegon Funding on September 14, 2024 and sell it today you would earn a total of 86.00 from holding Aegon Funding or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PepsiCo vs. Aegon Funding
Performance |
| Timeline |
| PepsiCo |
| Aegon Funding |
PepsiCo and Aegon Funding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepsiCo and Aegon Funding
The main advantage of trading using opposite PepsiCo and Aegon Funding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepsiCo position performs unexpectedly, Aegon Funding 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 Aegon Funding will offset losses from the drop in Aegon Funding's long position.| PepsiCo vs. Coca Cola Consolidated | PepsiCo vs. Monster Beverage Corp | PepsiCo vs. Celsius Holdings | PepsiCo vs. Keurig Dr Pepper |
| Aegon Funding vs. RiverNorth Specialty Finance | Aegon Funding vs. Royce Micro Cap | Aegon Funding vs. First Trust Enhanced | Aegon Funding vs. Voya Global Advantage |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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