Correlation Between Monster Beverage and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Aquestive Therapeutics 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 Aquestive Therapeutics 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 Aquestive Therapeutics, you can compare the effects of market volatilities on Monster Beverage and Aquestive Therapeutics 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 Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Aquestive Therapeutics.
Diversification Opportunities for Monster Beverage and Aquestive Therapeutics
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monster and Aquestive is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics 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 Aquestive Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquestive Therapeutics has no effect on the direction of Monster Beverage i.e., Monster Beverage and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between Monster Beverage and Aquestive Therapeutics
Given the investment horizon of 90 days Monster Beverage Corp is expected to under-perform the Aquestive Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Monster Beverage Corp is 3.54 times less risky than Aquestive Therapeutics. The stock trades about 0.0 of its potential returns per unit of risk. The Aquestive Therapeutics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 225.00 in Aquestive Therapeutics on August 30, 2024 and sell it today you would earn a total of 291.00 from holding Aquestive Therapeutics or generate 129.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Aquestive Therapeutics
Performance |
| Timeline |
| Monster Beverage Corp |
| Aquestive Therapeutics |
Monster Beverage and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Aquestive Therapeutics
The main advantage of trading using opposite Monster Beverage and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Aquestive Therapeutics 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 Aquestive Therapeutics will offset losses from the drop in Aquestive Therapeutics' long position.| Monster Beverage vs. Vita Coco | Monster Beverage vs. PepsiCo | Monster Beverage vs. The Coca Cola | Monster Beverage vs. Coca Cola Femsa SAB |
| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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