Correlation Between Jutal Offshore and PEPSICO

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

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

Diversification Opportunities for Jutal Offshore and PEPSICO

-0.06

Correlation Coefficient

Jutal Offshore  PEPSICO

Good diversification

The 3 months correlation between Jutal and PEPSICO is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Jutal Offshore Oil and PEPSICO INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPSICO INC and Jutal Offshore 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 Jutal Offshore Oil 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 Jutal Offshore i.e., Jutal Offshore and PEPSICO go up and down completely randomly.

Pair Corralation between Jutal Offshore and PEPSICO

Assuming the 90 days horizon Jutal Offshore Oil is expected to under-perform the PEPSICO. But the pink sheet apears to be less risky and, when comparing its historical volatility, Jutal Offshore Oil is 3.22 times less risky than PEPSICO. The pink sheet trades about 0.0 of its potential returns per unit of risk. The PEPSICO INC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  7,807  in PEPSICO INC on September 26, 2024 and sell it today you would earn a total of  4,920  from holding PEPSICO INC or generate 63.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	52.76%
Values	Daily Returns

Jutal Offshore Oil  vs.  PEPSICO INC

Jutal Offshore Oil

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jutal Offshore Oil are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Jutal Offshore may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PEPSICO INC

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PEPSICO INC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, PEPSICO sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jutal Offshore and PEPSICO

The main advantage of trading using opposite Jutal Offshore and PEPSICO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jutal Offshore 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 Jutal Offshore Oil 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.