Correlation Between Beauty Health and PEPSICO
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By analyzing existing cross correlation between Beauty Health Co and PEPSICO INC, you can compare the effects of market volatilities on Beauty Health 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 Beauty Health with a short position of PEPSICO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beauty Health and PEPSICO.
Diversification Opportunities for Beauty Health and PEPSICO
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beauty and PEPSICO is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Beauty Health Co and PEPSICO INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPSICO INC and Beauty Health 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 Beauty Health Co 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 Beauty Health i.e., Beauty Health and PEPSICO go up and down completely randomly.
Pair Corralation between Beauty Health and PEPSICO
Given the investment horizon of 90 days Beauty Health Co is expected to generate 13.6 times more return on investment than PEPSICO. However, Beauty Health is 13.6 times more volatile than PEPSICO INC. It trades about 0.05 of its potential returns per unit of risk. PEPSICO INC is currently generating about -0.22 per unit of risk. If you would invest 137.00 in Beauty Health Co on September 26, 2024 and sell it today you would earn a total of 12.00 from holding Beauty Health Co or generate 8.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Beauty Health Co vs. PEPSICO INC
Performance |
Timeline |
Beauty Health |
PEPSICO INC |
Beauty Health and PEPSICO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beauty Health and PEPSICO
The main advantage of trading using opposite Beauty Health and PEPSICO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beauty Health 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.Beauty Health vs. Clear Secure | Beauty Health vs. GXO Logistics | Beauty Health vs. Doximity | Beauty Health vs. Figs Inc |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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