Correlation Between Monster Beverage and HF Sinclair
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and HF Sinclair 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 HF Sinclair 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 HF Sinclair Corp, you can compare the effects of market volatilities on Monster Beverage and HF Sinclair 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 HF Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and HF Sinclair.
Diversification Opportunities for Monster Beverage and HF Sinclair
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Monster and DINO is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and HF Sinclair Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF Sinclair Corp 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 HF Sinclair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF Sinclair Corp has no effect on the direction of Monster Beverage i.e., Monster Beverage and HF Sinclair go up and down completely randomly.
Pair Corralation between Monster Beverage and HF Sinclair
Given the investment horizon of 90 days Monster Beverage Corp is expected to generate 0.7 times more return on investment than HF Sinclair. However, Monster Beverage Corp is 1.44 times less risky than HF Sinclair. It trades about 0.25 of its potential returns per unit of risk. HF Sinclair Corp is currently generating about -0.03 per unit of risk. If you would invest 4,936 in Monster Beverage Corp on December 1, 2024 and sell it today you would earn a total of 529.00 from holding Monster Beverage Corp or generate 10.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. HF Sinclair Corp
Performance |
| Timeline |
| Monster Beverage Corp |
| HF Sinclair Corp |
Monster Beverage and HF Sinclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and HF Sinclair
The main advantage of trading using opposite Monster Beverage and HF Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, HF Sinclair 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 HF Sinclair will offset losses from the drop in HF Sinclair'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 |
| HF Sinclair vs. Delek Energy | HF Sinclair vs. CVR Energy | HF Sinclair vs. Valero Energy | HF Sinclair vs. Marathon Petroleum Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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