Correlation Between Lupatech and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both Lupatech 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 Lupatech and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and Monster Beverage, you can compare the effects of market volatilities on Lupatech 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 Lupatech with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and Monster Beverage.
Diversification Opportunities for Lupatech and Monster Beverage
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lupatech and Monster is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech SA and Monster Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monster Beverage and Lupatech 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 Lupatech SA 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 has no effect on the direction of Lupatech i.e., Lupatech and Monster Beverage go up and down completely randomly.
Pair Corralation between Lupatech and Monster Beverage
Assuming the 90 days trading horizon Lupatech SA is expected to under-perform the Monster Beverage. In addition to that, Lupatech is 1.88 times more volatile than Monster Beverage. It trades about -0.14 of its total potential returns per unit of risk. Monster Beverage is currently generating about 0.21 per unit of volatility. If you would invest 3,780 in Monster Beverage on August 31, 2024 and sell it today you would earn a total of 266.00 from holding Monster Beverage or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lupatech SA vs. Monster Beverage
Performance |
| Timeline |
| Lupatech SA |
| Monster Beverage |
Lupatech and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lupatech and Monster Beverage
The main advantage of trading using opposite Lupatech and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech 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.| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Eternit SA |
| Monster Beverage vs. Fras le SA | Monster Beverage vs. Energisa SA | Monster Beverage vs. Clave Indices De | Monster Beverage vs. BTG Pactual Logstica |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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