Correlation Between Monster Beverage and Ocean Harvest
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Ocean Harvest 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 Ocean Harvest 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 Ocean Harvest Technology, you can compare the effects of market volatilities on Monster Beverage and Ocean Harvest 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 Ocean Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Ocean Harvest.
Diversification Opportunities for Monster Beverage and Ocean Harvest
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monster and Ocean is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Ocean Harvest Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Harvest 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 Ocean Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Harvest Technology has no effect on the direction of Monster Beverage i.e., Monster Beverage and Ocean Harvest go up and down completely randomly.
Pair Corralation between Monster Beverage and Ocean Harvest
Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 1.53 times more return on investment than Ocean Harvest. However, Monster Beverage is 1.53 times more volatile than Ocean Harvest Technology. It trades about 0.02 of its potential returns per unit of risk. Ocean Harvest Technology is currently generating about -0.03 per unit of risk. If you would invest 5,016 in Monster Beverage Corp on August 30, 2024 and sell it today you would earn a total of 483.00 from holding Monster Beverage Corp or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 83.27% |
| Values | Daily Returns |
Monster Beverage Corp vs. Ocean Harvest Technology
Performance |
| Timeline |
| Monster Beverage Corp |
| Ocean Harvest Technology |
Monster Beverage and Ocean Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Ocean Harvest
The main advantage of trading using opposite Monster Beverage and Ocean Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Ocean Harvest 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 Ocean Harvest will offset losses from the drop in Ocean Harvest's long position.| Monster Beverage vs. Schroders Investment Trusts | Monster Beverage vs. Sabien Technology Group | Monster Beverage vs. Aurora Investment Trust | Monster Beverage vs. Allianz Technology Trust |
| Ocean Harvest vs. Samsung Electronics Co | Ocean Harvest vs. Samsung Electronics Co | Ocean Harvest vs. Hyundai Motor | Ocean Harvest vs. Toyota Motor Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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