Correlation Between Monster Beverage and Lupatech
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Lupatech 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 Lupatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monster Beverage and Lupatech SA, you can compare the effects of market volatilities on Monster Beverage and Lupatech 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 Lupatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Lupatech.
Diversification Opportunities for Monster Beverage and Lupatech
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Monster and Lupatech is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA 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 Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of Monster Beverage i.e., Monster Beverage and Lupatech go up and down completely randomly.
Pair Corralation between Monster Beverage and Lupatech
Assuming the 90 days trading horizon Monster Beverage is expected to generate 0.61 times more return on investment than Lupatech. However, Monster Beverage is 1.64 times less risky than Lupatech. It trades about 0.12 of its potential returns per unit of risk. Lupatech SA is currently generating about -0.09 per unit of risk. If you would invest 3,796 in Monster Beverage on August 27, 2024 and sell it today you would earn a total of 138.00 from holding Monster Beverage or generate 3.64% 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. Lupatech SA
Performance |
| Timeline |
| Monster Beverage |
| Lupatech SA |
Monster Beverage and Lupatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Lupatech
The main advantage of trading using opposite Monster Beverage and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Lupatech 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 Lupatech will offset losses from the drop in Lupatech's long position.| Monster Beverage vs. Southwest Airlines Co | Monster Beverage vs. Telecomunicaes Brasileiras SA | Monster Beverage vs. Extra Space Storage | Monster Beverage vs. salesforce inc |
| Lupatech vs. Mitsubishi UFJ Financial | Lupatech vs. Sumitomo Mitsui Financial | Lupatech vs. Toyota Motor | Lupatech vs. Banco Santander Chile |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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