Correlation Between PepsiCo and Waystar Holding

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

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

Diversification Opportunities for PepsiCo and Waystar Holding

-0.86

Correlation Coefficient

PepsiCo  Waystar Holding

Pay attention - limited upside

The 3 months correlation between PepsiCo and Waystar is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and Waystar Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waystar Holding Corp 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 Waystar Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waystar Holding Corp has no effect on the direction of PepsiCo i.e., PepsiCo and Waystar Holding go up and down completely randomly.

Pair Corralation between PepsiCo and Waystar Holding

Considering the 90-day investment horizon PepsiCo is expected to under-perform the Waystar Holding. But the stock apears to be less risky and, when comparing its historical volatility, PepsiCo is 1.53 times less risky than Waystar Holding. The stock trades about -0.15 of its potential returns per unit of risk. The Waystar Holding Corp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  3,096  in Waystar Holding Corp on September 13, 2024 and sell it today you would earn a total of  306.00  from holding Waystar Holding Corp or generate 9.88% return on investment over 90 days.

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

PepsiCo  vs.  Waystar Holding Corp

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 latest inconsistent performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Waystar Holding Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Waystar Holding Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Waystar Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PepsiCo and Waystar Holding

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

The idea behind PepsiCo and Waystar Holding Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.