Correlation Between PepsiCo and Contextlogic

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

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

Diversification Opportunities for PepsiCo and Contextlogic

0.41

Correlation Coefficient

PepsiCo  Contextlogic

Very weak diversification

The 3 months correlation between PepsiCo and Contextlogic is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic 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 Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of PepsiCo i.e., PepsiCo and Contextlogic go up and down completely randomly.

Pair Corralation between PepsiCo and Contextlogic

Considering the 90-day investment horizon PepsiCo is expected to generate 0.35 times more return on investment than Contextlogic. However, PepsiCo is 2.84 times less risky than Contextlogic. It trades about 0.11 of its potential returns per unit of risk. Contextlogic is currently generating about 0.01 per unit of risk. If you would invest  13,025  in PepsiCo on May 10, 2025 and sell it today you would earn a total of  1,367  from holding PepsiCo or generate 10.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	47.54%
Values	Daily Returns

PepsiCo  vs.  Contextlogic

PepsiCo

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in PepsiCo are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, PepsiCo may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Contextlogic

Risk-Adjusted Performance

Weakest

Over the last 90 days Contextlogic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Contextlogic is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PepsiCo and Contextlogic

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

The idea behind PepsiCo and Contextlogic 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.