Correlation Between Bet-at-home and PepsiCo

Can any of the company-specific risk be diversified away by investing in both Bet-at-home 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 Bet-at-home and PepsiCo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between bet at home AG and PepsiCo, you can compare the effects of market volatilities on Bet-at-home 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 Bet-at-home with a short position of PepsiCo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet-at-home and PepsiCo.

Diversification Opportunities for Bet-at-home and PepsiCo

0.46

Correlation Coefficient

Bet-at-home  PepsiCo

Very weak diversification

The 3 months correlation between Bet-at-home and PepsiCo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and PepsiCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepsiCo and Bet-at-home 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 bet at home AG 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 Bet-at-home i.e., Bet-at-home and PepsiCo go up and down completely randomly.

Pair Corralation between Bet-at-home and PepsiCo

Assuming the 90 days trading horizon bet at home AG is expected to generate 3.03 times more return on investment than PepsiCo. However, Bet-at-home is 3.03 times more volatile than PepsiCo. It trades about 0.0 of its potential returns per unit of risk. PepsiCo is currently generating about -0.03 per unit of risk. If you would invest  269.00  in bet at home AG on September 24, 2024 and sell it today you would lose (19.00) from holding bet at home AG or give up 7.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

bet at home AG  vs.  PepsiCo

bet at home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days bet at home AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

PepsiCo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PepsiCo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PepsiCo is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bet-at-home and PepsiCo

The main advantage of trading using opposite Bet-at-home and PepsiCo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet-at-home 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 bet at home AG and PepsiCo 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.