Correlation Between STRAYER EDUCATION and Monster Beverage

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Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION and Monster Beverage 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 STRAYER EDUCATION and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and Monster Beverage Corp, you can compare the effects of market volatilities on STRAYER EDUCATION and Monster Beverage 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 STRAYER EDUCATION with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and Monster Beverage.

Diversification Opportunities for STRAYER EDUCATION and Monster Beverage

STRAYERMonsterDiversified AwaySTRAYERMonsterDiversified Away100%
0.22
  Correlation Coefficient

Modest diversification

The 3 months correlation between STRAYER and Monster is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and Monster Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monster Beverage Corp and STRAYER EDUCATION 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 STRAYER EDUCATION are associated (or correlated) with Monster Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monster Beverage Corp has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and Monster Beverage go up and down completely randomly.

Pair Corralation between STRAYER EDUCATION and Monster Beverage

Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 0.91 times more return on investment than Monster Beverage. However, STRAYER EDUCATION is 1.1 times less risky than Monster Beverage. It trades about 0.14 of its potential returns per unit of risk. Monster Beverage Corp is currently generating about -0.02 per unit of risk. If you would invest  7,999  in STRAYER EDUCATION on October 31, 2024 and sell it today you would earn a total of  1,251  from holding STRAYER EDUCATION or generate 15.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.33%
ValuesDaily Returns

STRAYER EDUCATION  vs.  Monster Beverage Corp

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 05101520
JavaScript chart by amCharts 3.21.15SQE MOB
       Timeline  
STRAYER EDUCATION 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in STRAYER EDUCATION are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, STRAYER EDUCATION exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan80859095
Monster Beverage Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Monster Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Monster Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan4647484950515253

STRAYER EDUCATION and Monster Beverage Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.35-4.01-2.66-1.32-0.02241.42.854.315.767.21 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15SQE MOB
       Returns  

Pair Trading with STRAYER EDUCATION and Monster Beverage

The main advantage of trading using opposite STRAYER EDUCATION and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION position performs unexpectedly, Monster Beverage 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 Monster Beverage will offset losses from the drop in Monster Beverage's long position.
The idea behind STRAYER EDUCATION and Monster Beverage Corp 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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