Correlation Between LOWES and PepsiCo
Specify exactly 2 symbols:
By analyzing existing cross correlation between LOWES PANIES INC and PepsiCo, you can compare the effects of market volatilities on LOWES and PepsiCo 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 LOWES with a short position of PepsiCo. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOWES and PepsiCo.
Diversification Opportunities for LOWES and PepsiCo
Poor diversification
The 3 months correlation between LOWES and PepsiCo is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding LOWES PANIES INC and PepsiCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepsiCo and LOWES 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 LOWES PANIES INC are associated (or correlated) with PepsiCo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PepsiCo has no effect on the direction of LOWES i.e., LOWES and PepsiCo go up and down completely randomly.
Pair Corralation between LOWES and PepsiCo
Assuming the 90 days trading horizon LOWES PANIES INC is expected to under-perform the PepsiCo. In addition to that, LOWES is 1.69 times more volatile than PepsiCo. It trades about -0.2 of its total potential returns per unit of risk. PepsiCo is currently generating about -0.14 per unit of volatility. If you would invest 16,634 in PepsiCo on September 5, 2024 and sell it today you would lose (616.00) from holding PepsiCo or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
LOWES PANIES INC vs. PepsiCo
Performance |
| Timeline |
| LOWES PANIES INC |
| PepsiCo |
LOWES and PepsiCo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOWES and PepsiCo
The main advantage of trading using opposite LOWES and PepsiCo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOWES position performs unexpectedly, PepsiCo 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 PepsiCo will offset losses from the drop in PepsiCo's long position.| LOWES vs. PepsiCo | LOWES vs. Boyd Gaming | LOWES vs. The Cheesecake Factory | LOWES vs. Meli Hotels International |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |