Correlation Between Monster Beverage and Grupo Hotelero
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Grupo Hotelero 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 Grupo Hotelero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monster Beverage Corp and Grupo Hotelero Santa, you can compare the effects of market volatilities on Monster Beverage and Grupo Hotelero 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 Grupo Hotelero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Grupo Hotelero.
Diversification Opportunities for Monster Beverage and Grupo Hotelero
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Monster and Grupo is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Grupo Hotelero Santa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Hotelero Santa 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 Corp are associated (or correlated) with Grupo Hotelero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Hotelero Santa has no effect on the direction of Monster Beverage i.e., Monster Beverage and Grupo Hotelero go up and down completely randomly.
Pair Corralation between Monster Beverage and Grupo Hotelero
Assuming the 90 days trading horizon Monster Beverage is expected to generate 4.41 times less return on investment than Grupo Hotelero. But when comparing it to its historical volatility, Monster Beverage Corp is 1.51 times less risky than Grupo Hotelero. It trades about 0.1 of its potential returns per unit of risk. Grupo Hotelero Santa is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 369.00 in Grupo Hotelero Santa on August 24, 2024 and sell it today you would earn a total of 29.00 from holding Grupo Hotelero Santa or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Grupo Hotelero Santa
Performance |
| Timeline |
| Monster Beverage Corp |
| Grupo Hotelero Santa |
Monster Beverage and Grupo Hotelero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Grupo Hotelero
The main advantage of trading using opposite Monster Beverage and Grupo Hotelero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Grupo Hotelero 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 Grupo Hotelero will offset losses from the drop in Grupo Hotelero's long position.| Monster Beverage vs. The Select Sector | Monster Beverage vs. Promotora y Operadora | Monster Beverage vs. iShares Global Timber | Monster Beverage vs. SPDR Series Trust |
| Grupo Hotelero vs. Deutsche Bank Aktiengesellschaft | Grupo Hotelero vs. Prudential Financial | Grupo Hotelero vs. First Majestic Silver | Grupo Hotelero vs. Capital One Financial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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