Correlation Between Monster Beverage and AGNC INVESTMENT

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

Diversification Opportunities for Monster Beverage and AGNC INVESTMENT

-0.07

Correlation Coefficient

Monster Beverage  AGNC INVESTMENT

Good diversification

The 3 months correlation between Monster and AGNC is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and AGNC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC INVESTMENT 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 AGNC INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGNC INVESTMENT has no effect on the direction of Monster Beverage i.e., Monster Beverage and AGNC INVESTMENT go up and down completely randomly.

Pair Corralation between Monster Beverage and AGNC INVESTMENT

Assuming the 90 days trading horizon Monster Beverage is expected to generate 1.14 times less return on investment than AGNC INVESTMENT. In addition to that, Monster Beverage is 1.37 times more volatile than AGNC INVESTMENT. It trades about 0.07 of its total potential returns per unit of risk. AGNC INVESTMENT is currently generating about 0.12 per unit of volatility. If you would invest  870.00  in AGNC INVESTMENT on December 23, 2024 and sell it today you would earn a total of  70.00  from holding AGNC INVESTMENT or generate 8.05% return on investment over 90 days.

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

Monster Beverage Corp  vs.  AGNC INVESTMENT

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 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Monster Beverage may actually be approaching a critical reversion point that can send shares even higher in April 2025.

AGNC INVESTMENT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AGNC INVESTMENT are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, AGNC INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Monster Beverage and AGNC INVESTMENT

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

The idea behind Monster Beverage Corp and AGNC INVESTMENT 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.