Correlation Between PepsiCo and Lindblad Expeditions
Can any of the company-specific risk be diversified away by investing in both PepsiCo and Lindblad Expeditions 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 Lindblad Expeditions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PepsiCo and Lindblad Expeditions Holdings, you can compare the effects of market volatilities on PepsiCo and Lindblad Expeditions 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 Lindblad Expeditions. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepsiCo and Lindblad Expeditions.
Diversification Opportunities for PepsiCo and Lindblad Expeditions
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PepsiCo and Lindblad is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions 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 Lindblad Expeditions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindblad Expeditions has no effect on the direction of PepsiCo i.e., PepsiCo and Lindblad Expeditions go up and down completely randomly.
Pair Corralation between PepsiCo and Lindblad Expeditions
Considering the 90-day investment horizon PepsiCo is expected to generate 0.45 times more return on investment than Lindblad Expeditions. However, PepsiCo is 2.22 times less risky than Lindblad Expeditions. It trades about 0.04 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about -0.11 per unit of risk. If you would invest 15,461 in PepsiCo on November 28, 2024 and sell it today you would earn a total of 181.00 from holding PepsiCo or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PepsiCo vs. Lindblad Expeditions Holdings
Performance |
| Timeline |
| PepsiCo |
| Lindblad Expeditions |
PepsiCo and Lindblad Expeditions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepsiCo and Lindblad Expeditions
The main advantage of trading using opposite PepsiCo and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepsiCo position performs unexpectedly, Lindblad Expeditions 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 Lindblad Expeditions will offset losses from the drop in Lindblad Expeditions' long position.| PepsiCo vs. Coca Cola Consolidated | PepsiCo vs. Monster Beverage Corp | PepsiCo vs. Celsius Holdings | PepsiCo vs. Keurig Dr Pepper |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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