Correlation Between PepsiCo and LOWES
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By analyzing existing cross correlation between PepsiCo and LOWES PANIES INC, you can compare the effects of market volatilities on PepsiCo and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepsiCo and LOWES.
Diversification Opportunities for PepsiCo and LOWES
Significant diversification
The 3 months correlation between PepsiCo and LOWES is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and LOWES PANIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES PANIES INC 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES PANIES INC has no effect on the direction of PepsiCo i.e., PepsiCo and LOWES go up and down completely randomly.
Pair Corralation between PepsiCo and LOWES
Considering the 90-day investment horizon PepsiCo is expected to under-perform the LOWES. In addition to that, PepsiCo is 1.76 times more volatile than LOWES PANIES INC. It trades about 0.0 of its total potential returns per unit of risk. LOWES PANIES INC is currently generating about 0.07 per unit of volatility. If you would invest 8,370 in LOWES PANIES INC on December 30, 2024 and sell it today you would earn a total of 285.00 from holding LOWES PANIES INC or generate 3.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 96.88% |
Values | Daily Returns |
PepsiCo vs. LOWES PANIES INC
Performance |
Timeline |
PepsiCo |
LOWES PANIES INC |
PepsiCo and LOWES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PepsiCo and LOWES
The main advantage of trading using opposite PepsiCo and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepsiCo position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES's long position.PepsiCo vs. Coca Cola Consolidated | PepsiCo vs. Monster Beverage Corp | PepsiCo vs. Celsius Holdings | PepsiCo vs. Keurig Dr Pepper |
Check out your portfolio center.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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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