Correlation Between CITIC Telecom and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom 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 CITIC Telecom and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIC Telecom International and Monster Beverage Corp, you can compare the effects of market volatilities on CITIC Telecom 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 CITIC Telecom with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and Monster Beverage.
Diversification Opportunities for CITIC Telecom and Monster Beverage
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CITIC and Monster is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International 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 CITIC Telecom 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 CITIC Telecom International 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 CITIC Telecom i.e., CITIC Telecom and Monster Beverage go up and down completely randomly.
Pair Corralation between CITIC Telecom and Monster Beverage
Assuming the 90 days horizon CITIC Telecom International is expected to generate 5.38 times more return on investment than Monster Beverage. However, CITIC Telecom is 5.38 times more volatile than Monster Beverage Corp. It trades about 0.08 of its potential returns per unit of risk. Monster Beverage Corp is currently generating about 0.02 per unit of risk. If you would invest 3.91 in CITIC Telecom International on September 13, 2024 and sell it today you would earn a total of 25.09 from holding CITIC Telecom International or generate 641.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
CITIC Telecom International vs. Monster Beverage Corp
Performance |
| Timeline |
| CITIC Telecom Intern |
| Monster Beverage Corp |
CITIC Telecom and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and Monster Beverage
The main advantage of trading using opposite CITIC Telecom and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom 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.| CITIC Telecom vs. Superior Plus Corp | CITIC Telecom vs. SIVERS SEMICONDUCTORS AB | CITIC Telecom vs. Norsk Hydro ASA | CITIC Telecom vs. Reliance Steel Aluminum |
| Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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