Correlation Between Monster Beverage and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and JB Hunt 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 JB Hunt 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 JB Hunt Transport, you can compare the effects of market volatilities on Monster Beverage and JB Hunt 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 JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and JB Hunt.
Diversification Opportunities for Monster Beverage and JB Hunt
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Monster and 0J71 is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and JB Hunt Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JB Hunt Transport 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 JB Hunt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JB Hunt Transport has no effect on the direction of Monster Beverage i.e., Monster Beverage and JB Hunt go up and down completely randomly.
Pair Corralation between Monster Beverage and JB Hunt
Assuming the 90 days trading horizon Monster Beverage Corp is expected to under-perform the JB Hunt. But the stock apears to be less risky and, when comparing its historical volatility, Monster Beverage Corp is 1.86 times less risky than JB Hunt. The stock trades about -0.22 of its potential returns per unit of risk. The JB Hunt Transport is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 18,355 in JB Hunt Transport on October 10, 2024 and sell it today you would lose (659.00) from holding JB Hunt Transport or give up 3.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. JB Hunt Transport
Performance |
| Timeline |
| Monster Beverage Corp |
| JB Hunt Transport |
Monster Beverage and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and JB Hunt
The main advantage of trading using opposite Monster Beverage and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, JB Hunt 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 JB Hunt will offset losses from the drop in JB Hunt's long position.| Monster Beverage vs. Canadian General Investments | Monster Beverage vs. Westlake Chemical Corp | Monster Beverage vs. New Residential Investment | Monster Beverage vs. Lindsell Train Investment |
| JB Hunt vs. Primorus Investments plc | JB Hunt vs. Beeks Trading | JB Hunt vs. Herald Investment Trust | JB Hunt vs. Mobius Investment Trust |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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