Correlation Between GraniteShares ETF and PEPSICO

Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and PEPSICO at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GraniteShares ETF and PEPSICO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GraniteShares ETF Trust and PEPSICO INC 425, you can compare the effects of market volatilities on GraniteShares ETF 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 GraniteShares ETF with a short position of PEPSICO. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and PEPSICO.

Diversification Opportunities for GraniteShares ETF and PEPSICO

-0.35

Correlation Coefficient

GraniteShares ETF  PEPSICO

Very good diversification

The 3 months correlation between GraniteShares and PEPSICO is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and PEPSICO INC 425 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPSICO INC 425 and GraniteShares ETF 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 GraniteShares ETF Trust 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 INC 425 has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and PEPSICO go up and down completely randomly.

Pair Corralation between GraniteShares ETF and PEPSICO

Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 0.55 times more return on investment than PEPSICO. However, GraniteShares ETF Trust is 1.82 times less risky than PEPSICO. It trades about 0.48 of its potential returns per unit of risk. PEPSICO INC 425 is currently generating about 0.13 per unit of risk. If you would invest  2,949  in GraniteShares ETF Trust on September 24, 2024 and sell it today you would earn a total of  551.00  from holding GraniteShares ETF Trust or generate 18.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.0%
Values	Daily Returns

GraniteShares ETF Trust  vs.  PEPSICO INC 425

GraniteShares ETF Trust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares ETF Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, GraniteShares ETF sustained solid returns over the last few months and may actually be approaching a breakup point.

PEPSICO INC 425

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PEPSICO INC 425 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, PEPSICO is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GraniteShares ETF and PEPSICO

The main advantage of trading using opposite GraniteShares ETF and PEPSICO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF 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.

The idea behind GraniteShares ETF Trust and PEPSICO INC 425 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.