Correlation Between PepsiCo and Oakworth Capital
Can any of the company-specific risk be diversified away by investing in both PepsiCo and Oakworth Capital 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 Oakworth Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PepsiCo and Oakworth Capital, you can compare the effects of market volatilities on PepsiCo and Oakworth Capital 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 Oakworth Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepsiCo and Oakworth Capital.
Diversification Opportunities for PepsiCo and Oakworth Capital
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PepsiCo and Oakworth is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and Oakworth Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakworth Capital 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 Oakworth Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakworth Capital has no effect on the direction of PepsiCo i.e., PepsiCo and Oakworth Capital go up and down completely randomly.
Pair Corralation between PepsiCo and Oakworth Capital
Considering the 90-day investment horizon PepsiCo is expected to generate 12.89 times less return on investment than Oakworth Capital. In addition to that, PepsiCo is 1.25 times more volatile than Oakworth Capital. It trades about 0.02 of its total potential returns per unit of risk. Oakworth Capital is currently generating about 0.28 per unit of volatility. If you would invest 3,150 in Oakworth Capital on November 3, 2024 and sell it today you would earn a total of 238.00 from holding Oakworth Capital or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
PepsiCo vs. Oakworth Capital
Performance |
| Timeline |
| PepsiCo |
| Oakworth Capital |
PepsiCo and Oakworth Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepsiCo and Oakworth Capital
The main advantage of trading using opposite PepsiCo and Oakworth Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepsiCo position performs unexpectedly, Oakworth Capital 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 Oakworth Capital will offset losses from the drop in Oakworth Capital's long position.| PepsiCo vs. Coca Cola Consolidated | PepsiCo vs. Monster Beverage Corp | PepsiCo vs. Celsius Holdings | PepsiCo vs. Keurig Dr Pepper |
| Oakworth Capital vs. Fidus Investment Corp | Oakworth Capital vs. Nordic Semiconductor ASA | Oakworth Capital vs. SLR Investment Corp | Oakworth Capital vs. Skyworks Solutions |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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