Correlation Between PepsiCo and LEGGETT
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By analyzing existing cross correlation between PepsiCo and LEGGETT PLATT INC, you can compare the effects of market volatilities on PepsiCo and LEGGETT 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 LEGGETT. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepsiCo and LEGGETT.
Diversification Opportunities for PepsiCo and LEGGETT
Very weak diversification
The 3 months correlation between PepsiCo and LEGGETT is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and LEGGETT PLATT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEGGETT PLATT 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 LEGGETT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEGGETT PLATT INC has no effect on the direction of PepsiCo i.e., PepsiCo and LEGGETT go up and down completely randomly.
Pair Corralation between PepsiCo and LEGGETT
Considering the 90-day investment horizon PepsiCo is expected to under-perform the LEGGETT. In addition to that, PepsiCo is 2.06 times more volatile than LEGGETT PLATT INC. It trades about -0.16 of its total potential returns per unit of risk. LEGGETT PLATT INC is currently generating about -0.1 per unit of volatility. If you would invest 9,500 in LEGGETT PLATT INC on September 9, 2024 and sell it today you would lose (106.00) from holding LEGGETT PLATT INC or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PepsiCo vs. LEGGETT PLATT INC
Performance |
| Timeline |
| PepsiCo |
| LEGGETT PLATT INC |
PepsiCo and LEGGETT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepsiCo and LEGGETT
The main advantage of trading using opposite PepsiCo and LEGGETT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepsiCo position performs unexpectedly, LEGGETT 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 LEGGETT will offset losses from the drop in LEGGETT's long position.| PepsiCo vs. Coca Cola Consolidated | PepsiCo vs. Monster Beverage Corp | PepsiCo vs. Celsius Holdings | PepsiCo vs. Keurig Dr Pepper |
| LEGGETT vs. ScanSource | LEGGETT vs. Apogee Enterprises | LEGGETT vs. Iridium Communications | LEGGETT vs. Cementos Pacasmayo SAA |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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