Correlation Between Monster Beverage and Sligro Food

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

By analyzing existing cross correlation between Monster Beverage Corp and Sligro Food Group, you can compare the effects of market volatilities on Monster Beverage and Sligro Food 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 Monster Beverage with a short position of Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Sligro Food.

Diversification Opportunities for Monster Beverage and Sligro Food

-0.4

Correlation Coefficient

Monster Beverage  Sligro Food

Very good diversification

The 3 months correlation between Monster and Sligro is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group and Monster Beverage 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 Monster Beverage Corp are associated (or correlated) with Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Monster Beverage i.e., Monster Beverage and Sligro Food go up and down completely randomly.

Pair Corralation between Monster Beverage and Sligro Food

Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 1.03 times more return on investment than Sligro Food. However, Monster Beverage is 1.03 times more volatile than Sligro Food Group. It trades about 0.01 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.06 per unit of risk. If you would invest  4,965  in Monster Beverage Corp on October 11, 2024 and sell it today you would earn a total of  177.00  from holding Monster Beverage Corp or generate 3.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.0%
Values	Daily Returns

Monster Beverage Corp  vs.  Sligro Food Group

Monster Beverage Corp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Monster Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Monster Beverage is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Sligro Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sligro Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Monster Beverage and Sligro Food

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

The idea behind Monster Beverage Corp and Sligro Food Group 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.