Correlation Between Monster Beverage and Xp
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Xp 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 Xp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monster Beverage and Xp Inc, you can compare the effects of market volatilities on Monster Beverage and Xp 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 Xp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Xp.
Diversification Opportunities for Monster Beverage and Xp
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monster and Xp is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc 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 Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of Monster Beverage i.e., Monster Beverage and Xp go up and down completely randomly.
Pair Corralation between Monster Beverage and Xp
Assuming the 90 days trading horizon Monster Beverage is expected to generate 0.86 times more return on investment than Xp. However, Monster Beverage is 1.17 times less risky than Xp. It trades about 0.08 of its potential returns per unit of risk. Xp Inc is currently generating about -0.24 per unit of risk. If you would invest 3,816 in Monster Beverage on August 24, 2024 and sell it today you would earn a total of 97.00 from holding Monster Beverage or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage vs. Xp Inc
Performance |
| Timeline |
| Monster Beverage |
| Xp Inc |
Monster Beverage and Xp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Xp
The main advantage of trading using opposite Monster Beverage and Xp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Xp 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 Xp will offset losses from the drop in Xp's long position.| Monster Beverage vs. Micron Technology | Monster Beverage vs. Agilent Technologies | Monster Beverage vs. Automatic Data Processing | Monster Beverage vs. Charter Communications |
| Xp vs. SVB Financial Group | Xp vs. Monster Beverage | Xp vs. Taiwan Semiconductor Manufacturing | Xp vs. NXP Semiconductors NV |
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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