Correlation Between Monster Beverage and Abingdon Health
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Abingdon 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 Abingdon 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 Abingdon Health Plc, you can compare the effects of market volatilities on Monster Beverage and Abingdon 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 Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Abingdon Health.
Diversification Opportunities for Monster Beverage and Abingdon Health
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monster and Abingdon is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health Plc 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 Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of Monster Beverage i.e., Monster Beverage and Abingdon Health go up and down completely randomly.
Pair Corralation between Monster Beverage and Abingdon Health
Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 0.73 times more return on investment than Abingdon Health. However, Monster Beverage Corp is 1.37 times less risky than Abingdon Health. It trades about 0.09 of its potential returns per unit of risk. Abingdon Health Plc is currently generating about -0.21 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Abingdon Health Plc
Performance |
| Timeline |
| Monster Beverage Corp |
| Abingdon Health Plc |
Monster Beverage and Abingdon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Abingdon Health
The main advantage of trading using opposite Monster Beverage and Abingdon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Abingdon 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 Abingdon Health will offset losses from the drop in Abingdon 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 |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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