Correlation Between PepsiCo and CDT Environmental

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

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

Diversification Opportunities for PepsiCo and CDT Environmental

-0.45

Correlation Coefficient

PepsiCo  CDT Environmental

Very good diversification

The 3 months correlation between PepsiCo and CDT is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and CDT Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDT Environmental 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 CDT Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDT Environmental has no effect on the direction of PepsiCo i.e., PepsiCo and CDT Environmental go up and down completely randomly.

Pair Corralation between PepsiCo and CDT Environmental

Considering the 90-day investment horizon PepsiCo is expected to generate 0.15 times more return on investment than CDT Environmental. However, PepsiCo is 6.64 times less risky than CDT Environmental. It trades about 0.07 of its potential returns per unit of risk. CDT Environmental Technology is currently generating about -0.09 per unit of risk. If you would invest  14,214  in PepsiCo on September 12, 2025 and sell it today you would earn a total of  756.00  from holding PepsiCo or generate 5.32% return on investment over 90 days.

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

PepsiCo  vs.  CDT Environmental Technology

PepsiCo

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in PepsiCo are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, PepsiCo is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

CDT Environmental

Risk-Adjusted Performance

Weakest

Over the last 90 days CDT Environmental Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PepsiCo and CDT Environmental

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

The idea behind PepsiCo and CDT Environmental Technology 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.