Correlation Between Monster Beverage and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and BE Semiconductor 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 BE Semiconductor 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 BE Semiconductor Industries, you can compare the effects of market volatilities on Monster Beverage and BE Semiconductor 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 BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and BE Semiconductor.
Diversification Opportunities for Monster Beverage and BE Semiconductor
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monster and 0XVE is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and BE Semiconductor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Semiconductor Ind 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 BE Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Semiconductor Ind has no effect on the direction of Monster Beverage i.e., Monster Beverage and BE Semiconductor go up and down completely randomly.
Pair Corralation between Monster Beverage and BE Semiconductor
Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 0.52 times more return on investment than BE Semiconductor. However, Monster Beverage Corp is 1.92 times less risky than BE Semiconductor. It trades about 0.15 of its potential returns per unit of risk. BE Semiconductor Industries is currently generating about 0.01 per unit of risk. If you would invest 4,822 in Monster Beverage Corp on September 3, 2024 and sell it today you would earn a total of 715.00 from holding Monster Beverage Corp or generate 14.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. BE Semiconductor Industries
Performance |
| Timeline |
| Monster Beverage Corp |
| BE Semiconductor Ind |
Monster Beverage and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and BE Semiconductor
The main advantage of trading using opposite Monster Beverage and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, BE Semiconductor 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 BE Semiconductor will offset losses from the drop in BE Semiconductor's long position.| Monster Beverage vs. Catalyst Media Group | Monster Beverage vs. CATLIN GROUP | Monster Beverage vs. Tamburi Investment Partners | Monster Beverage vs. Magnora ASA |
| BE Semiconductor vs. Catalyst Media Group | BE Semiconductor vs. CATLIN GROUP | BE Semiconductor vs. Tamburi Investment Partners | BE Semiconductor vs. Magnora ASA |
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.
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