Correlation Between Ihuman and PepsiCo

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

By analyzing existing cross correlation between Ihuman Inc and PepsiCo, you can compare the effects of market volatilities on Ihuman 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 Ihuman with a short position of PepsiCo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and PepsiCo.

Diversification Opportunities for Ihuman and PepsiCo

0.84

Correlation Coefficient

Ihuman  PepsiCo

Very poor diversification

The 3 months correlation between Ihuman and PepsiCo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and PepsiCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepsiCo and Ihuman 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 Ihuman Inc 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 has no effect on the direction of Ihuman i.e., Ihuman and PepsiCo go up and down completely randomly.

Pair Corralation between Ihuman and PepsiCo

Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 3.04 times more return on investment than PepsiCo. However, Ihuman is 3.04 times more volatile than PepsiCo. It trades about 0.09 of its potential returns per unit of risk. PepsiCo is currently generating about 0.08 per unit of risk. If you would invest  234.00  in Ihuman Inc on May 7, 2025 and sell it today you would earn a total of  51.00  from holding Ihuman Inc or generate 21.79% return on investment over 90 days.

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

Ihuman Inc  vs.  PepsiCo

Ihuman Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Ihuman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

PepsiCo

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PepsiCo are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, PepsiCo may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Ihuman and PepsiCo

The main advantage of trading using opposite Ihuman and PepsiCo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman 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.

The idea behind Ihuman Inc and PepsiCo 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.