Correlation Between Monster Beverage and Weiss Korea
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Weiss Korea 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 Weiss Korea 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 Weiss Korea Opportunity, you can compare the effects of market volatilities on Monster Beverage and Weiss Korea 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 Weiss Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Weiss Korea.
Diversification Opportunities for Monster Beverage and Weiss Korea
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monster and Weiss is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Weiss Korea Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiss Korea Opportunity 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 Weiss Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiss Korea Opportunity has no effect on the direction of Monster Beverage i.e., Monster Beverage and Weiss Korea go up and down completely randomly.
Pair Corralation between Monster Beverage and Weiss Korea
Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 1.19 times more return on investment than Weiss Korea. However, Monster Beverage is 1.19 times more volatile than Weiss Korea Opportunity. It trades about 0.0 of its potential returns per unit of risk. Weiss Korea Opportunity is currently generating about -0.03 per unit of risk. If you would invest 5,759 in Monster Beverage Corp on September 2, 2024 and sell it today you would lose (222.00) from holding Monster Beverage Corp or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.95% |
| Values | Daily Returns |
Monster Beverage Corp vs. Weiss Korea Opportunity
Performance |
| Timeline |
| Monster Beverage Corp |
| Weiss Korea Opportunity |
Monster Beverage and Weiss Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Weiss Korea
The main advantage of trading using opposite Monster Beverage and Weiss Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Weiss Korea 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 Weiss Korea will offset losses from the drop in Weiss Korea's long position.| Monster Beverage vs. Uniper SE | Monster Beverage vs. Mulberry Group PLC | Monster Beverage vs. London Security Plc | Monster Beverage vs. Triad Group PLC |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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