Correlation Between BTG Pactual and Monster Beverage

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

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

Diversification Opportunities for BTG Pactual and Monster Beverage

-0.83

Correlation Coefficient

BTG Pactual  Monster Beverage

Pay attention - limited upside

The 3 months correlation between BTG and Monster is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Monster Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monster Beverage and BTG Pactual 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 BTG Pactual Logstica are associated (or correlated) with Monster Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monster Beverage has no effect on the direction of BTG Pactual i.e., BTG Pactual and Monster Beverage go up and down completely randomly.

Pair Corralation between BTG Pactual and Monster Beverage

Assuming the 90 days trading horizon BTG Pactual Logstica is expected to under-perform the Monster Beverage. But the fund apears to be less risky and, when comparing its historical volatility, BTG Pactual Logstica is 2.26 times less risky than Monster Beverage. The fund trades about -0.15 of its potential returns per unit of risk. The Monster Beverage is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  3,355  in Monster Beverage on August 31, 2024 and sell it today you would earn a total of  691.00  from holding Monster Beverage or generate 20.6% return on investment over 90 days.

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

BTG Pactual Logstica  vs.  Monster Beverage

BTG Pactual Logstica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BTG Pactual Logstica has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Monster Beverage

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Monster Beverage are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Monster Beverage sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BTG Pactual and Monster Beverage

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

The idea behind BTG Pactual Logstica and Monster Beverage 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.