Correlation Between Monster Beverage and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and McEwen Mining 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 McEwen Mining 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 McEwen Mining, you can compare the effects of market volatilities on Monster Beverage and McEwen Mining 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and McEwen Mining.
Diversification Opportunities for Monster Beverage and McEwen Mining
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Monster and McEwen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Monster Beverage i.e., Monster Beverage and McEwen Mining go up and down completely randomly.
Pair Corralation between Monster Beverage and McEwen Mining
If you would invest 107,000 in Monster Beverage Corp on August 28, 2024 and sell it today you would earn a total of 3,865 from holding Monster Beverage Corp or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. McEwen Mining
Performance |
| Timeline |
| Monster Beverage Corp |
| McEwen Mining |
Monster Beverage and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and McEwen Mining
The main advantage of trading using opposite Monster Beverage and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| Monster Beverage vs. Grupo Sports World | Monster Beverage vs. DXC Technology | Monster Beverage vs. Samsung Electronics Co | Monster Beverage vs. Verizon Communications |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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