Correlation Between Caledonia Investments and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both Caledonia Investments 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 Caledonia Investments and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Investments and Monster Beverage Corp, you can compare the effects of market volatilities on Caledonia Investments 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 Caledonia Investments with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Investments and Monster Beverage.
Diversification Opportunities for Caledonia Investments and Monster Beverage
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caledonia and Monster is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Investments 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 Caledonia Investments 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 Caledonia Investments 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 Caledonia Investments i.e., Caledonia Investments and Monster Beverage go up and down completely randomly.
Pair Corralation between Caledonia Investments and Monster Beverage
Assuming the 90 days trading horizon Caledonia Investments is expected to generate 0.73 times more return on investment than Monster Beverage. However, Caledonia Investments is 1.37 times less risky than Monster Beverage. It trades about 0.19 of its potential returns per unit of risk. Monster Beverage Corp is currently generating about -0.09 per unit of risk. If you would invest 330,481 in Caledonia Investments on October 29, 2024 and sell it today you would earn a total of 38,019 from holding Caledonia Investments or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Caledonia Investments vs. Monster Beverage Corp
Performance |
| Timeline |
| Caledonia Investments |
| Monster Beverage Corp |
Caledonia Investments and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Investments and Monster Beverage
The main advantage of trading using opposite Caledonia Investments and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Investments 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.| Caledonia Investments vs. Zurich Insurance Group | Caledonia Investments vs. Medical Properties Trust | Caledonia Investments vs. UNIQA Insurance Group | Caledonia Investments vs. Vienna Insurance Group |
| Monster Beverage vs. Berkshire Hathaway | Monster Beverage vs. Samsung Electronics Co | Monster Beverage vs. Samsung Electronics Co | Monster Beverage vs. Chocoladefabriken Lindt Spruengli |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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