Correlation Between Baillie Gifford and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford 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 Baillie Gifford and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford European and Monster Beverage Corp, you can compare the effects of market volatilities on Baillie Gifford 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 Baillie Gifford with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Monster Beverage.
Diversification Opportunities for Baillie Gifford and Monster Beverage
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baillie and Monster is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford European 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 Baillie Gifford 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 Baillie Gifford European 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 Baillie Gifford i.e., Baillie Gifford and Monster Beverage go up and down completely randomly.
Pair Corralation between Baillie Gifford and Monster Beverage
Assuming the 90 days trading horizon Baillie Gifford European is expected to under-perform the Monster Beverage. But the stock apears to be less risky and, when comparing its historical volatility, Baillie Gifford European is 1.24 times less risky than Monster Beverage. The stock trades about -0.01 of its potential returns per unit of risk. The Monster Beverage Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 5,134 in Monster Beverage Corp on October 23, 2024 and sell it today you would lose (180.00) from holding Monster Beverage Corp or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Baillie Gifford European vs. Monster Beverage Corp
Performance |
| Timeline |
| Baillie Gifford European |
| Monster Beverage Corp |
Baillie Gifford and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Monster Beverage
The main advantage of trading using opposite Baillie Gifford and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford 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.| Baillie Gifford vs. Herald Investment Trust | Baillie Gifford vs. Zoom Video Communications | Baillie Gifford vs. Charter Communications Cl | Baillie Gifford vs. Mineral Financial Investments |
| Monster Beverage vs. Home Depot | Monster Beverage vs. Weiss Korea Opportunity | Monster Beverage vs. River and Mercantile | Monster Beverage vs. Chrysalis Investments |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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