Correlation Between PEPSICO and Dow Jones
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By analyzing existing cross correlation between PEPSICO INC and Dow Jones Industrial, you can compare the effects of market volatilities on PEPSICO and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of PEPSICO and Dow Jones.
Diversification Opportunities for PEPSICO and Dow Jones
Significant diversification
The 3 months correlation between PEPSICO and Dow is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PEPSICO INC and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 INC are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of PEPSICO i.e., PEPSICO and Dow Jones go up and down completely randomly.
Pair Corralation between PEPSICO and Dow Jones
Assuming the 90 days trading horizon PEPSICO INC is expected to generate 121.4 times more return on investment than Dow Jones. However, PEPSICO is 121.4 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 8,741 in PEPSICO INC on August 28, 2024 and sell it today you would lose (949.00) from holding PEPSICO INC or give up 10.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 52.53% |
| Values | Daily Returns |
PEPSICO INC vs. Dow Jones Industrial
Performance |
| Timeline |
PEPSICO and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
PEPSICO INC
Pair trading matchups for PEPSICO
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with PEPSICO and Dow Jones
The main advantage of trading using opposite PEPSICO and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PEPSICO position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| PEPSICO vs. Estee Lauder Companies | PEPSICO vs. Steven Madden | PEPSICO vs. Hillman Solutions Corp | PEPSICO vs. Papaya Growth Opportunity |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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