Correlation Between Chalice Mining and Monster Beverage

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

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

Diversification Opportunities for Chalice Mining and Monster Beverage

-0.24

Correlation Coefficient

Chalice Mining  Monster Beverage

Very good diversification

The 3 months correlation between Chalice and Monster is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and Monster Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monster Beverage Corp and Chalice Mining 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 Chalice Mining Limited 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 Corp has no effect on the direction of Chalice Mining i.e., Chalice Mining and Monster Beverage go up and down completely randomly.

Pair Corralation between Chalice Mining and Monster Beverage

Assuming the 90 days horizon Chalice Mining Limited is expected to under-perform the Monster Beverage. In addition to that, Chalice Mining is 3.82 times more volatile than Monster Beverage Corp. It trades about -0.02 of its total potential returns per unit of risk. Monster Beverage Corp is currently generating about 0.0 per unit of volatility. If you would invest  5,285  in Monster Beverage Corp on October 4, 2024 and sell it today you would lose (192.00) from holding Monster Beverage Corp or give up 3.63% of portfolio value over 90 days.

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

Chalice Mining Limited  vs.  Monster Beverage Corp

Chalice Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chalice Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Monster Beverage Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monster Beverage Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Monster Beverage may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Chalice Mining and Monster Beverage

The main advantage of trading using opposite Chalice Mining and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chalice Mining 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 Chalice Mining Limited and Monster Beverage Corp 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.