Correlation Between Monster Beverage and Khiron Life

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

Diversification Opportunities for Monster Beverage and Khiron Life

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Monster and Khiron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Khiron Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khiron Life Sciences 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 Khiron Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khiron Life Sciences has no effect on the direction of Monster Beverage i.e., Monster Beverage and Khiron Life go up and down completely randomly.

Pair Corralation between Monster Beverage and Khiron Life

If you would invest  2.16  in Khiron Life Sciences on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Khiron Life Sciences or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Monster Beverage Corp  vs.  Khiron Life Sciences

 Performance 
       Timeline  
Monster Beverage Corp 

Risk-Adjusted Performance

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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 comparatively uncertain basic indicators, Monster Beverage may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Khiron Life Sciences 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Khiron Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Khiron Life is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Monster Beverage and Khiron Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Monster Beverage and Khiron Life

The main advantage of trading using opposite Monster Beverage and Khiron Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Khiron Life 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 Khiron Life will offset losses from the drop in Khiron Life's long position.
The idea behind Monster Beverage Corp and Khiron Life Sciences 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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