Correlation Between Monster Beverage and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Ashtead Technology 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 Ashtead Technology 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 Ashtead Technology Holdings, you can compare the effects of market volatilities on Monster Beverage and Ashtead Technology 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 Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Ashtead Technology.
Diversification Opportunities for Monster Beverage and Ashtead Technology
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Monster and Ashtead is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology 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 Ashtead Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Technology has no effect on the direction of Monster Beverage i.e., Monster Beverage and Ashtead Technology go up and down completely randomly.
Pair Corralation between Monster Beverage and Ashtead Technology
Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 1.02 times more return on investment than Ashtead Technology. However, Monster Beverage is 1.02 times more volatile than Ashtead Technology Holdings. It trades about 0.14 of its potential returns per unit of risk. Ashtead Technology Holdings is currently generating about -0.3 per unit of risk. If you would invest 4,970 in Monster Beverage Corp on November 28, 2024 and sell it today you would earn a total of 246.00 from holding Monster Beverage Corp or generate 4.95% 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. Ashtead Technology Holdings
Performance |
| Timeline |
| Monster Beverage Corp |
| Ashtead Technology |
Monster Beverage and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Ashtead Technology
The main advantage of trading using opposite Monster Beverage and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Ashtead Technology 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 Ashtead Technology will offset losses from the drop in Ashtead Technology's long position.| Monster Beverage vs. Pets at Home | Monster Beverage vs. Tata Steel Limited | Monster Beverage vs. Clean Power Hydrogen | Monster Beverage vs. Iron Mountain |
| Ashtead Technology vs. OneSavings Bank PLC | Ashtead Technology vs. New Residential Investment | Ashtead Technology vs. Sartorius Stedim Biotech | Ashtead Technology vs. Infineon Technologies AG |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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