Correlation Between Monster Beverage and Public Storage
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Public Storage 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 Public Storage 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 Public Storage, you can compare the effects of market volatilities on Monster Beverage and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Public Storage.
Diversification Opportunities for Monster Beverage and Public Storage
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monster and Public is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Monster Beverage i.e., Monster Beverage and Public Storage go up and down completely randomly.
Pair Corralation between Monster Beverage and Public Storage
Assuming the 90 days trading horizon Monster Beverage is expected to generate 1.19 times less return on investment than Public Storage. In addition to that, Monster Beverage is 1.06 times more volatile than Public Storage. It trades about 0.13 of its total potential returns per unit of risk. Public Storage is currently generating about 0.16 per unit of volatility. If you would invest 33,258 in Public Storage on August 30, 2024 and sell it today you would earn a total of 2,063 from holding Public Storage or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Monster Beverage Corp vs. Public Storage
Performance |
| Timeline |
| Monster Beverage Corp |
| Public Storage |
Monster Beverage and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Public Storage
The main advantage of trading using opposite Monster Beverage and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| Monster Beverage vs. Schroders Investment Trusts | Monster Beverage vs. Sabien Technology Group | Monster Beverage vs. Aurora Investment Trust | Monster Beverage vs. Allianz Technology Trust |
| Public Storage vs. Tungsten West PLC | Public Storage vs. Argo Group Limited | Public Storage vs. Hardide PLC | Public Storage vs. Versarien PLC |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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