Correlation Between Monster Beverage and IBEX Technologies

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

Diversification Opportunities for Monster Beverage and IBEX Technologies

0.7

Correlation Coefficient

Monster Beverage  IBEX Technologies

Poor diversification

The 3 months correlation between Monster and IBEX is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and IBEX Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX Technologies 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 IBEX Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX Technologies has no effect on the direction of Monster Beverage i.e., Monster Beverage and IBEX Technologies go up and down completely randomly.

Pair Corralation between Monster Beverage and IBEX Technologies

Assuming the 90 days trading horizon Monster Beverage is expected to generate 104.67 times less return on investment than IBEX Technologies. But when comparing it to its historical volatility, Monster Beverage Corp is 30.66 times less risky than IBEX Technologies. It trades about 0.01 of its potential returns per unit of risk. IBEX Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  53.00  in IBEX Technologies on September 26, 2024 and sell it today you would earn a total of  68,347  from holding IBEX Technologies or generate 128956.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.59%
Values	Daily Returns

Monster Beverage Corp  vs.  IBEX Technologies

Monster Beverage Corp

Risk-Adjusted Performance

5 of 100

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

IBEX Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IBEX Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IBEX Technologies is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Monster Beverage and IBEX Technologies

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

The idea behind Monster Beverage Corp and IBEX Technologies 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.