Correlation Between PepsiCo and Reitar Logtech

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

By analyzing existing cross correlation between PepsiCo and Reitar Logtech Holdings, you can compare the effects of market volatilities on PepsiCo and Reitar Logtech 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 Reitar Logtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepsiCo and Reitar Logtech.

Diversification Opportunities for PepsiCo and Reitar Logtech

0.72

Correlation Coefficient

PepsiCo  Reitar Logtech

Poor diversification

The 3 months correlation between PepsiCo and Reitar is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and Reitar Logtech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitar Logtech Holdings 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 are associated (or correlated) with Reitar Logtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitar Logtech Holdings has no effect on the direction of PepsiCo i.e., PepsiCo and Reitar Logtech go up and down completely randomly.

Pair Corralation between PepsiCo and Reitar Logtech

Considering the 90-day investment horizon PepsiCo is expected to generate 0.22 times more return on investment than Reitar Logtech. However, PepsiCo is 4.54 times less risky than Reitar Logtech. It trades about -0.1 of its potential returns per unit of risk. Reitar Logtech Holdings is currently generating about -0.09 per unit of risk. If you would invest  15,129  in PepsiCo on October 22, 2024 and sell it today you would lose (304.00) from holding PepsiCo or give up 2.01% of portfolio value over 90 days.

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

PepsiCo  vs.  Reitar Logtech Holdings

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. Even with unsteady performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Reitar Logtech Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reitar Logtech Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with PepsiCo and Reitar Logtech

The main advantage of trading using opposite PepsiCo and Reitar Logtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepsiCo position performs unexpectedly, Reitar Logtech 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 Reitar Logtech will offset losses from the drop in Reitar Logtech's long position.

The idea behind PepsiCo and Reitar Logtech Holdings 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.