Correlation Between PepsiCo and VERIZON
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By analyzing existing cross correlation between PepsiCo and VERIZON MUNICATIONS INC, you can compare the effects of market volatilities on PepsiCo and VERIZON 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 VERIZON. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepsiCo and VERIZON.
Diversification Opportunities for PepsiCo and VERIZON
Very weak diversification
The 3 months correlation between PepsiCo and VERIZON is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and VERIZON MUNICATIONS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERIZON MUNICATIONS 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 VERIZON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERIZON MUNICATIONS INC has no effect on the direction of PepsiCo i.e., PepsiCo and VERIZON go up and down completely randomly.
Pair Corralation between PepsiCo and VERIZON
Considering the 90-day investment horizon PepsiCo is expected to under-perform the VERIZON. In addition to that, PepsiCo is 1.28 times more volatile than VERIZON MUNICATIONS INC. It trades about -0.14 of its total potential returns per unit of risk. VERIZON MUNICATIONS INC is currently generating about -0.03 per unit of volatility. If you would invest 8,679 in VERIZON MUNICATIONS INC on September 12, 2024 and sell it today you would lose (57.00) from holding VERIZON MUNICATIONS INC or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
PepsiCo vs. VERIZON MUNICATIONS INC
Performance |
| Timeline |
| PepsiCo |
| VERIZON MUNICATIONS INC |
PepsiCo and VERIZON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepsiCo and VERIZON
The main advantage of trading using opposite PepsiCo and VERIZON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepsiCo position performs unexpectedly, VERIZON 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 VERIZON will offset losses from the drop in VERIZON's 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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