Correlation Between Monster Beverage and Xtant Medical

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

Diversification Opportunities for Monster Beverage and Xtant Medical

-0.57

Correlation Coefficient

Monster Beverage  Xtant Medical

Excellent diversification

The 3 months correlation between Monster and Xtant is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Xtant Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtant Medical Holdings 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 Xtant Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtant Medical Holdings has no effect on the direction of Monster Beverage i.e., Monster Beverage and Xtant Medical go up and down completely randomly.

Pair Corralation between Monster Beverage and Xtant Medical

Given the investment horizon of 90 days Monster Beverage is expected to generate 3.44 times less return on investment than Xtant Medical. But when comparing it to its historical volatility, Monster Beverage Corp is 3.93 times less risky than Xtant Medical. It trades about 0.11 of its potential returns per unit of risk. Xtant Medical Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Xtant Medical Holdings on December 20, 2024 and sell it today you would earn a total of  10.00  from holding Xtant Medical Holdings or generate 27.78% return on investment over 90 days.

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

Monster Beverage Corp  vs.  Xtant Medical Holdings

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.

Xtant Medical Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xtant Medical Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Xtant Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Monster Beverage and Xtant Medical

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

The idea behind Monster Beverage Corp and Xtant Medical Holdings 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.