Correlation Between PepsiCo and Aegon NV
Can any of the company-specific risk be diversified away by investing in both PepsiCo and Aegon NV 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 NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PepsiCo and Aegon NV ADR, you can compare the effects of market volatilities on PepsiCo and Aegon NV 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 NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepsiCo and Aegon NV.
Diversification Opportunities for PepsiCo and Aegon NV
Excellent diversification
The 3 months correlation between PepsiCo and Aegon is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and Aegon NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV ADR 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 NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon NV ADR has no effect on the direction of PepsiCo i.e., PepsiCo and Aegon NV go up and down completely randomly.
Pair Corralation between PepsiCo and Aegon NV
Considering the 90-day investment horizon PepsiCo is expected to under-perform the Aegon NV. But the stock apears to be less risky and, when comparing its historical volatility, PepsiCo is 1.43 times less risky than Aegon NV. The stock trades about -0.06 of its potential returns per unit of risk. The Aegon NV ADR is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 628.00 in Aegon NV ADR on September 1, 2024 and sell it today you would earn a total of 21.00 from holding Aegon NV ADR or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PepsiCo vs. Aegon NV ADR
Performance |
| Timeline |
| PepsiCo |
| Aegon NV ADR |
PepsiCo and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepsiCo and Aegon NV
The main advantage of trading using opposite PepsiCo and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepsiCo position performs unexpectedly, Aegon NV 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 NV will offset losses from the drop in Aegon NV's long position.| PepsiCo vs. Coca Cola Femsa SAB | PepsiCo vs. National Beverage Corp | PepsiCo vs. Embotelladora Andina SA |
| Aegon NV vs. Hartford Financial Services | Aegon NV vs. Goosehead Insurance | Aegon NV vs. International General Insurance | Aegon NV vs. Enstar Group 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |