Correlation Between Monster Beverage and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Schweiter 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 Schweiter 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 Schweiter Technologies AG, you can compare the effects of market volatilities on Monster Beverage and Schweiter 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 Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Schweiter Technologies.
Diversification Opportunities for Monster Beverage and Schweiter Technologies
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Monster and Schweiter is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter 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 Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Monster Beverage i.e., Monster Beverage and Schweiter Technologies go up and down completely randomly.
Pair Corralation between Monster Beverage and Schweiter Technologies
Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 0.79 times more return on investment than Schweiter Technologies. However, Monster Beverage Corp is 1.26 times less risky than Schweiter Technologies. It trades about 0.04 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about -0.02 per unit of risk. If you would invest 5,153 in Monster Beverage Corp on September 1, 2024 and sell it today you would earn a total of 384.00 from holding Monster Beverage Corp or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Schweiter Technologies AG
Performance |
| Timeline |
| Monster Beverage Corp |
| Schweiter Technologies |
Monster Beverage and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Schweiter Technologies
The main advantage of trading using opposite Monster Beverage and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Schweiter 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.| Monster Beverage vs. Uniper SE | Monster Beverage vs. Mulberry Group PLC | Monster Beverage vs. London Security Plc | Monster Beverage vs. Triad Group PLC |
| Schweiter Technologies vs. Spirent Communications plc | Schweiter Technologies vs. mobilezone holding AG | Schweiter Technologies vs. MTI Wireless Edge | Schweiter Technologies vs. GoldMining |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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