Correlation Between Monster Beverage and Banco Actinver

Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Banco Actinver 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 Banco Actinver 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 Banco Actinver SA, you can compare the effects of market volatilities on Monster Beverage and Banco Actinver 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 Banco Actinver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Banco Actinver.

Diversification Opportunities for Monster Beverage and Banco Actinver

0.14

Correlation Coefficient

Monster Beverage  Banco Actinver

Average diversification

The 3 months correlation between Monster and Banco is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Banco Actinver SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Actinver SA 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 Banco Actinver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Actinver SA has no effect on the direction of Monster Beverage i.e., Monster Beverage and Banco Actinver go up and down completely randomly.

Pair Corralation between Monster Beverage and Banco Actinver

Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 1.32 times more return on investment than Banco Actinver. However, Monster Beverage is 1.32 times more volatile than Banco Actinver SA. It trades about 0.08 of its potential returns per unit of risk. Banco Actinver SA is currently generating about -0.11 per unit of risk. If you would invest  104,200  in Monster Beverage Corp on December 23, 2024 and sell it today you would earn a total of  9,800  from holding Monster Beverage Corp or generate 9.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Monster Beverage Corp  vs.  Banco Actinver SA

Monster Beverage Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Monster Beverage Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Monster Beverage may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Banco Actinver SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banco Actinver SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Monster Beverage and Banco Actinver

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

The idea behind Monster Beverage Corp and Banco Actinver SA 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.