Correlation Between Monster Beverage and Ito En
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Ito En 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 Ito En 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 Ito En, you can compare the effects of market volatilities on Monster Beverage and Ito En 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 Ito En. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Ito En.
Diversification Opportunities for Monster Beverage and Ito En
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Monster and Ito is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Ito En in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ito En 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 Ito En. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ito En has no effect on the direction of Monster Beverage i.e., Monster Beverage and Ito En go up and down completely randomly.
Pair Corralation between Monster Beverage and Ito En
Given the investment horizon of 90 days Monster Beverage Corp is expected to generate 2.56 times more return on investment than Ito En. However, Monster Beverage is 2.56 times more volatile than Ito En. It trades about 0.13 of its potential returns per unit of risk. Ito En is currently generating about -0.22 per unit of risk. If you would invest 5,230 in Monster Beverage Corp on September 2, 2024 and sell it today you would earn a total of 283.00 from holding Monster Beverage Corp or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Ito En
Performance |
| Timeline |
| Monster Beverage Corp |
| Ito En |
Monster Beverage and Ito En Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Ito En
The main advantage of trading using opposite Monster Beverage and Ito En positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Ito En 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 Ito En will offset losses from the drop in Ito En'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 |
| Ito En vs. PepsiCo | Ito En vs. Coca Cola Consolidated | Ito En vs. Monster Beverage Corp | Ito En vs. Celsius 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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