Correlation Between IShares Blockchain and PEPSICO

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

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

Diversification Opportunities for IShares Blockchain and PEPSICO

-0.62

Correlation Coefficient

IShares Blockchain  PEPSICO

Excellent diversification

The 3 months correlation between IShares and PEPSICO is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding iShares Blockchain and and PEPSICO INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPSICO INC and IShares Blockchain 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 iShares Blockchain and 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 has no effect on the direction of IShares Blockchain i.e., IShares Blockchain and PEPSICO go up and down completely randomly.

Pair Corralation between IShares Blockchain and PEPSICO

Given the investment horizon of 90 days iShares Blockchain and is expected to under-perform the PEPSICO. In addition to that, IShares Blockchain is 8.72 times more volatile than PEPSICO INC. It trades about -0.1 of its total potential returns per unit of risk. PEPSICO INC is currently generating about 0.04 per unit of volatility. If you would invest  9,139  in PEPSICO INC on September 24, 2024 and sell it today you would earn a total of  40.00  from holding PEPSICO INC or generate 0.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

iShares Blockchain and  vs.  PEPSICO INC

iShares Blockchain and

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Blockchain and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, IShares Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

PEPSICO INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PEPSICO INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PEPSICO is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Blockchain and PEPSICO

The main advantage of trading using opposite IShares Blockchain and PEPSICO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Blockchain 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 iShares Blockchain and and PEPSICO INC 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.