Correlation Between PepsiCo and OmniAb
Can any of the company-specific risk be diversified away by investing in both PepsiCo and OmniAb 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 OmniAb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PepsiCo and OmniAb Inc, you can compare the effects of market volatilities on PepsiCo and OmniAb 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 OmniAb. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepsiCo and OmniAb.
Diversification Opportunities for PepsiCo and OmniAb
Weak diversification
The 3 months correlation between PepsiCo and OmniAb is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and OmniAb Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OmniAb Inc 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 OmniAb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OmniAb Inc has no effect on the direction of PepsiCo i.e., PepsiCo and OmniAb go up and down completely randomly.
Pair Corralation between PepsiCo and OmniAb
Considering the 90-day investment horizon PepsiCo is expected to under-perform the OmniAb. But the stock apears to be less risky and, when comparing its historical volatility, PepsiCo is 9.98 times less risky than OmniAb. The stock trades about -0.06 of its potential returns per unit of risk. The OmniAb Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 30.00 in OmniAb Inc on September 1, 2024 and sell it today you would earn a total of 4.00 from holding OmniAb Inc or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 71.43% |
| Values | Daily Returns |
PepsiCo vs. OmniAb Inc
Performance |
| Timeline |
| PepsiCo |
| OmniAb Inc |
PepsiCo and OmniAb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepsiCo and OmniAb
The main advantage of trading using opposite PepsiCo and OmniAb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepsiCo position performs unexpectedly, OmniAb 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 OmniAb will offset losses from the drop in OmniAb's long position.| PepsiCo vs. Coca Cola Femsa SAB | PepsiCo vs. Embotelladora Andina SA | PepsiCo vs. National Beverage Corp | PepsiCo vs. Embotelladora Andina SA |
| OmniAb vs. Tff Pharmaceuticals | OmniAb vs. Eliem Therapeutics | OmniAb vs. Inhibrx | OmniAb vs. Enliven Therapeutics |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |