Correlation Between Public Storage and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both Public Storage and Monster Beverage 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 Public Storage and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Monster Beverage Corp, you can compare the effects of market volatilities on Public Storage and Monster Beverage 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 Public Storage with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Monster Beverage.
Diversification Opportunities for Public Storage and Monster Beverage
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Public and Monster is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Monster Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monster Beverage Corp and Public Storage 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 Public Storage are associated (or correlated) with Monster Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monster Beverage Corp has no effect on the direction of Public Storage i.e., Public Storage and Monster Beverage go up and down completely randomly.
Pair Corralation between Public Storage and Monster Beverage
Assuming the 90 days trading horizon Public Storage is expected to generate 0.78 times more return on investment than Monster Beverage. However, Public Storage is 1.28 times less risky than Monster Beverage. It trades about 0.11 of its potential returns per unit of risk. Monster Beverage Corp is currently generating about -0.32 per unit of risk. If you would invest 29,466 in Public Storage on November 9, 2024 and sell it today you would earn a total of 809.00 from holding Public Storage or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. Monster Beverage Corp
Performance |
| Timeline |
| Public Storage |
| Monster Beverage Corp |
Public Storage and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Monster Beverage
The main advantage of trading using opposite Public Storage and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Monster Beverage 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 Monster Beverage will offset losses from the drop in Monster Beverage's long position.| Public Storage vs. Geely Automobile Holdings | Public Storage vs. MTI Wireless Edge | Public Storage vs. Taiwan Semiconductor Manufacturing | Public Storage vs. Nordic Semiconductor ASA |
| Monster Beverage vs. Golden Metal Resources | Monster Beverage vs. AMG Advanced Metallurgical | Monster Beverage vs. Sovereign Metals | Monster Beverage vs. Europa Metals |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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