Correlation Between PepsiCo and KIMCO

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

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

Diversification Opportunities for PepsiCo and KIMCO

-0.08

Correlation Coefficient

PepsiCo  KIMCO

Good diversification

The 3 months correlation between PepsiCo and KIMCO is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and KIMCO RLTY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMCO RLTY P 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 KIMCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMCO RLTY P has no effect on the direction of PepsiCo i.e., PepsiCo and KIMCO go up and down completely randomly.

Pair Corralation between PepsiCo and KIMCO

Considering the 90-day investment horizon PepsiCo is expected to under-perform the KIMCO. But the stock apears to be less risky and, when comparing its historical volatility, PepsiCo is 2.38 times less risky than KIMCO. The stock trades about -0.04 of its potential returns per unit of risk. The KIMCO RLTY P is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  7,226  in KIMCO RLTY P on September 13, 2024 and sell it today you would earn a total of  619.00  from holding KIMCO RLTY P or generate 8.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	39.49%
Values	Daily Returns

PepsiCo  vs.  KIMCO RLTY P

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.

KIMCO RLTY P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KIMCO RLTY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for KIMCO RLTY P investors.

Pair Trading with PepsiCo and KIMCO

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

The idea behind PepsiCo and KIMCO RLTY P 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.