Correlation Between Monster Beverage and 43118DAA8

Can any of the company-specific risk be diversified away by investing in both Monster Beverage and 43118DAA8 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 43118DAA8 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 US43118DAA81, you can compare the effects of market volatilities on Monster Beverage and 43118DAA8 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 43118DAA8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and 43118DAA8.

Diversification Opportunities for Monster Beverage and 43118DAA8

-0.78

Correlation Coefficient

Monster Beverage  43118DAA8

Pay attention - limited upside

The 3 months correlation between Monster and 43118DAA8 is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and US43118DAA81 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US43118DAA81 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 43118DAA8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US43118DAA81 has no effect on the direction of Monster Beverage i.e., Monster Beverage and 43118DAA8 go up and down completely randomly.

Pair Corralation between Monster Beverage and 43118DAA8

Given the investment horizon of 90 days Monster Beverage Corp is expected to generate 2.91 times more return on investment than 43118DAA8. However, Monster Beverage is 2.91 times more volatile than US43118DAA81. It trades about 0.1 of its potential returns per unit of risk. US43118DAA81 is currently generating about -0.4 per unit of risk. If you would invest  5,251  in Monster Beverage Corp on December 24, 2024 and sell it today you would earn a total of  480.00  from holding Monster Beverage Corp or generate 9.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	50.82%
Values	Daily Returns

Monster Beverage Corp  vs.  US43118DAA81

Monster Beverage Corp

Risk-Adjusted Performance

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 unfluctuating basic indicators, Monster Beverage may actually be approaching a critical reversion point that can send shares even higher in April 2025.

US43118DAA81

Risk-Adjusted Performance

Very Weak

Over the last 90 days US43118DAA81 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for US43118DAA81 investors.

Pair Trading with Monster Beverage and 43118DAA8

The main advantage of trading using opposite Monster Beverage and 43118DAA8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, 43118DAA8 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 43118DAA8 will offset losses from the drop in 43118DAA8's long position.

The idea behind Monster Beverage Corp and US43118DAA81 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.