Correlation Between Monster Beverage and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Polar Capital 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 Polar Capital 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 Polar Capital Technology, you can compare the effects of market volatilities on Monster Beverage and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Polar Capital.
Diversification Opportunities for Monster Beverage and Polar Capital
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monster and Polar is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of Monster Beverage i.e., Monster Beverage and Polar Capital go up and down completely randomly.
Pair Corralation between Monster Beverage and Polar Capital
Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 0.86 times more return on investment than Polar Capital. However, Monster Beverage Corp is 1.17 times less risky than Polar Capital. It trades about 0.18 of its potential returns per unit of risk. Polar Capital Technology is currently generating about -0.08 per unit of risk. If you would invest 4,853 in Monster Beverage Corp on November 29, 2024 and sell it today you would earn a total of 304.00 from holding Monster Beverage Corp or generate 6.26% 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. Polar Capital Technology
Performance |
| Timeline |
| Monster Beverage Corp |
| Polar Capital Technology |
Monster Beverage and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Polar Capital
The main advantage of trading using opposite Monster Beverage and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| Monster Beverage vs. Home Depot | Monster Beverage vs. Metals Exploration Plc | Monster Beverage vs. Critical Metals Plc | Monster Beverage vs. Air Products Chemicals |
| Polar Capital vs. Edita Food Industries | Polar Capital vs. Induction Healthcare Group | Polar Capital vs. National Beverage Corp | Polar Capital vs. Darden Restaurants |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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