Correlation Between Monster Beverage and Pan American
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Pan American 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 Pan American 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 Pan American Silver, you can compare the effects of market volatilities on Monster Beverage and Pan American 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 Pan American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Pan American.
Diversification Opportunities for Monster Beverage and Pan American
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Monster and Pan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Pan American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan American Silver 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 Pan American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan American Silver has no effect on the direction of Monster Beverage i.e., Monster Beverage and Pan American go up and down completely randomly.
Pair Corralation between Monster Beverage and Pan American
Assuming the 90 days trading horizon Monster Beverage Corp is expected to under-perform the Pan American. But the stock apears to be less risky and, when comparing its historical volatility, Monster Beverage Corp is 1.73 times less risky than Pan American. The stock trades about -0.31 of its potential returns per unit of risk. The Pan American Silver is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,973 in Pan American Silver on October 24, 2024 and sell it today you would earn a total of 187.00 from holding Pan American Silver or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Pan American Silver
Performance |
| Timeline |
| Monster Beverage Corp |
| Pan American Silver |
Monster Beverage and Pan American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Pan American
The main advantage of trading using opposite Monster Beverage and Pan American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Pan American 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 Pan American will offset losses from the drop in Pan American's long position.| Monster Beverage vs. OneSavings Bank PLC | Monster Beverage vs. Westlake Chemical Corp | Monster Beverage vs. Evolution Gaming Group | Monster Beverage vs. Bankers Investment Trust |
| Pan American vs. JD Sports Fashion | Pan American vs. Monster Beverage Corp | Pan American vs. Universal Display Corp | Pan American vs. STMicroelectronics NV |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |