Correlation Between HUTCHMED China and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both HUTCHMED China 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 HUTCHMED China and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUTCHMED China and Monster Beverage Corp, you can compare the effects of market volatilities on HUTCHMED China 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 HUTCHMED China with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUTCHMED China and Monster Beverage.
Diversification Opportunities for HUTCHMED China and Monster Beverage
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between HUTCHMED and Monster is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHMED China 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 HUTCHMED China 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 HUTCHMED China 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 HUTCHMED China i.e., HUTCHMED China and Monster Beverage go up and down completely randomly.
Pair Corralation between HUTCHMED China and Monster Beverage
Assuming the 90 days trading horizon HUTCHMED China is expected to under-perform the Monster Beverage. In addition to that, HUTCHMED China is 1.86 times more volatile than Monster Beverage Corp. It trades about 0.0 of its total potential returns per unit of risk. Monster Beverage Corp is currently generating about 0.03 per unit of volatility. If you would invest 5,232 in Monster Beverage Corp on September 3, 2024 and sell it today you would earn a total of 305.00 from holding Monster Beverage Corp or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
HUTCHMED China vs. Monster Beverage Corp
Performance |
| Timeline |
| HUTCHMED China |
| Monster Beverage Corp |
HUTCHMED China and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUTCHMED China and Monster Beverage
The main advantage of trading using opposite HUTCHMED China and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUTCHMED China 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.| HUTCHMED China vs. Monster Beverage Corp | HUTCHMED China vs. MTI Wireless Edge | HUTCHMED China vs. Global Net Lease | HUTCHMED China vs. UNIQA Insurance Group |
| Monster Beverage vs. Catalyst Media Group | Monster Beverage vs. CATLIN GROUP | Monster Beverage vs. Magnora ASA | Monster Beverage vs. RTW Venture Fund |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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