Correlation Between Monster Beverage and Acme United
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Acme United 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 Acme United 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 Acme United, you can compare the effects of market volatilities on Monster Beverage and Acme United 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 Acme United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Acme United.
Diversification Opportunities for Monster Beverage and Acme United
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monster and Acme is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Acme United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acme United 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 Acme United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acme United has no effect on the direction of Monster Beverage i.e., Monster Beverage and Acme United go up and down completely randomly.
Pair Corralation between Monster Beverage and Acme United
Given the investment horizon of 90 days Monster Beverage is expected to generate 1.87 times less return on investment than Acme United. In addition to that, Monster Beverage is 1.04 times more volatile than Acme United. It trades about 0.12 of its total potential returns per unit of risk. Acme United is currently generating about 0.24 per unit of volatility. If you would invest 4,026 in Acme United on August 30, 2024 and sell it today you would earn a total of 409.00 from holding Acme United or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Acme United
Performance |
| Timeline |
| Monster Beverage Corp |
| Acme United |
Monster Beverage and Acme United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Acme United
The main advantage of trading using opposite Monster Beverage and Acme United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Acme United 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 Acme United will offset losses from the drop in Acme United's long position.| Monster Beverage vs. Vita Coco | Monster Beverage vs. PepsiCo | Monster Beverage vs. The Coca Cola | Monster Beverage vs. Coca Cola Femsa SAB |
| Acme United vs. Mannatech Incorporated | Acme United vs. European Wax Center | Acme United vs. Inter Parfums | Acme United vs. Spectrum Brands Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |