Correlation Between Monster Beverage and Integral

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

Diversification Opportunities for Monster Beverage and Integral

0.66

Correlation Coefficient

Monster Beverage  Integral

Poor diversification

The 3 months correlation between Monster and Integral is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Monster Beverage i.e., Monster Beverage and Integral go up and down completely randomly.

Pair Corralation between Monster Beverage and Integral

Given the investment horizon of 90 days Monster Beverage Corp is expected to under-perform the Integral. But the stock apears to be less risky and, when comparing its historical volatility, Monster Beverage Corp is 2.3 times less risky than Integral. The stock trades about -0.45 of its potential returns per unit of risk. The Integral Ad Science is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  1,047  in Integral Ad Science on October 27, 2024 and sell it today you would lose (36.00) from holding Integral Ad Science or give up 3.44% of portfolio value over 90 days.

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

Monster Beverage Corp  vs.  Integral Ad Science

Monster Beverage Corp

Risk-Adjusted Performance

0 of 100

Very 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 latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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 Integral

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

The idea behind Monster Beverage Corp and Integral Ad Science 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..