Correlation Between Monster Beverage and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Naturhouse Health 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 Naturhouse Health 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 Naturhouse Health SA, you can compare the effects of market volatilities on Monster Beverage and Naturhouse Health 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 Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Naturhouse Health.
Diversification Opportunities for Monster Beverage and Naturhouse Health
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Monster and Naturhouse is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health 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 Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Monster Beverage i.e., Monster Beverage and Naturhouse Health go up and down completely randomly.
Pair Corralation between Monster Beverage and Naturhouse Health
Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 1.62 times more return on investment than Naturhouse Health. However, Monster Beverage is 1.62 times more volatile than Naturhouse Health SA. It trades about 0.09 of its potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.1 per unit of risk. If you would invest 5,313 in Monster Beverage Corp on August 29, 2024 and sell it today you would earn a total of 186.00 from holding Monster Beverage Corp or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Naturhouse Health SA
Performance |
| Timeline |
| Monster Beverage Corp |
| Naturhouse Health |
Monster Beverage and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Naturhouse Health
The main advantage of trading using opposite Monster Beverage and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Naturhouse Health 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| Monster Beverage vs. Lendinvest PLC | Monster Beverage vs. Neometals | Monster Beverage vs. Albion Technology General | Monster Beverage vs. Jupiter Fund Management |
| Naturhouse Health vs. Lendinvest PLC | Naturhouse Health vs. Neometals | Naturhouse Health vs. Albion Technology General | Naturhouse Health vs. Jupiter Fund Management |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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