Correlation Between PepsiCo and Occidental
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By analyzing existing cross correlation between PepsiCo and Occidental Petroleum 43, you can compare the effects of market volatilities on PepsiCo and Occidental 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 Occidental. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepsiCo and Occidental.
Diversification Opportunities for PepsiCo and Occidental
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PepsiCo and Occidental is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and Occidental Petroleum 43 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum 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 Occidental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum has no effect on the direction of PepsiCo i.e., PepsiCo and Occidental go up and down completely randomly.
Pair Corralation between PepsiCo and Occidental
Considering the 90-day investment horizon PepsiCo is expected to under-perform the Occidental. In addition to that, PepsiCo is 1.28 times more volatile than Occidental Petroleum 43. It trades about -0.11 of its total potential returns per unit of risk. Occidental Petroleum 43 is currently generating about -0.09 per unit of volatility. If you would invest 8,320 in Occidental Petroleum 43 on September 4, 2024 and sell it today you would lose (77.00) from holding Occidental Petroleum 43 or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 52.38% |
| Values | Daily Returns |
PepsiCo vs. Occidental Petroleum 43
Performance |
| Timeline |
| PepsiCo |
| Occidental Petroleum |
PepsiCo and Occidental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepsiCo and Occidental
The main advantage of trading using opposite PepsiCo and Occidental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepsiCo position performs unexpectedly, Occidental 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 Occidental will offset losses from the drop in Occidental's long position.| PepsiCo vs. Coca Cola Consolidated | PepsiCo vs. Monster Beverage Corp | PepsiCo vs. Celsius Holdings | PepsiCo vs. Keurig Dr Pepper |
| Occidental vs. Sweetgreen | Occidental vs. Texas Roadhouse | Occidental vs. Constellation Brands Class | Occidental vs. PepsiCo |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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