Correlation Between Monster Beverage and GX AI

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

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

Diversification Opportunities for Monster Beverage and GX AI

0.82

Correlation Coefficient

Monster Beverage  GX AI

Very poor diversification

The 3 months correlation between Monster and BAIQ39 is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage and GX AI TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GX AI TECH 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 are associated (or correlated) with GX AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GX AI TECH has no effect on the direction of Monster Beverage i.e., Monster Beverage and GX AI go up and down completely randomly.

Pair Corralation between Monster Beverage and GX AI

Assuming the 90 days trading horizon Monster Beverage is expected to generate 1.24 times less return on investment than GX AI. In addition to that, Monster Beverage is 1.2 times more volatile than GX AI TECH. It trades about 0.07 of its total potential returns per unit of risk. GX AI TECH is currently generating about 0.1 per unit of volatility. If you would invest  6,776  in GX AI TECH on September 30, 2024 and sell it today you would earn a total of  1,342  from holding GX AI TECH or generate 19.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

Monster Beverage  vs.  GX AI TECH

Monster Beverage

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monster Beverage are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Monster Beverage sustained solid returns over the last few months and may actually be approaching a breakup point.

GX AI TECH

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GX AI TECH are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, GX AI sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Monster Beverage and GX AI

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

The idea behind Monster Beverage and GX AI TECH 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.