Correlation Between Monster Beverage and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and AstraZeneca PLC 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 Monster Beverage and AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monster Beverage and AstraZeneca PLC, you can compare the effects of market volatilities on Monster Beverage and AstraZeneca PLC 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 Monster Beverage with a short position of AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and AstraZeneca PLC.
Diversification Opportunities for Monster Beverage and AstraZeneca PLC
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monster and AstraZeneca is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC and Monster Beverage 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 Monster Beverage are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of Monster Beverage i.e., Monster Beverage and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Monster Beverage and AstraZeneca PLC
Assuming the 90 days trading horizon Monster Beverage is expected to generate 0.55 times more return on investment than AstraZeneca PLC. However, Monster Beverage is 1.83 times less risky than AstraZeneca PLC. It trades about 0.14 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about -0.17 per unit of risk. If you would invest 3,796 in Monster Beverage on August 29, 2024 and sell it today you would earn a total of 176.00 from holding Monster Beverage or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage vs. AstraZeneca PLC
Performance |
| Timeline |
| Monster Beverage |
| AstraZeneca PLC |
Monster Beverage and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and AstraZeneca PLC
The main advantage of trading using opposite Monster Beverage and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| Monster Beverage vs. Unity Software | Monster Beverage vs. Extra Space Storage | Monster Beverage vs. Zoom Video Communications | Monster Beverage vs. NXP Semiconductors NV |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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