Correlation Between Monster Beverage and Lassonde Industries
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Lassonde Industries 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 Lassonde Industries 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 Lassonde Industries, you can compare the effects of market volatilities on Monster Beverage and Lassonde Industries 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 Lassonde Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Lassonde Industries.
Diversification Opportunities for Monster Beverage and Lassonde Industries
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Monster and Lassonde is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Lassonde Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lassonde Industries 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 Lassonde Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lassonde Industries has no effect on the direction of Monster Beverage i.e., Monster Beverage and Lassonde Industries go up and down completely randomly.
Pair Corralation between Monster Beverage and Lassonde Industries
Given the investment horizon of 90 days Monster Beverage is expected to generate 113.35 times less return on investment than Lassonde Industries. But when comparing it to its historical volatility, Monster Beverage Corp is 3.12 times less risky than Lassonde Industries. It trades about 0.0 of its potential returns per unit of risk. Lassonde Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,264 in Lassonde Industries on August 27, 2024 and sell it today you would earn a total of 3,303 from holding Lassonde Industries or generate 35.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 61.69% |
| Values | Daily Returns |
Monster Beverage Corp vs. Lassonde Industries
Performance |
| Timeline |
| Monster Beverage Corp |
| Lassonde Industries |
Monster Beverage and Lassonde Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Lassonde Industries
The main advantage of trading using opposite Monster Beverage and Lassonde Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Lassonde Industries 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 Lassonde Industries will offset losses from the drop in Lassonde Industries' long position.| Monster Beverage vs. Vita Coco | Monster Beverage vs. PepsiCo | Monster Beverage vs. The Coca Cola | Monster Beverage vs. Coca Cola Femsa SAB |
| Lassonde Industries vs. PepsiCo | Lassonde Industries vs. Coca Cola Consolidated | Lassonde Industries vs. Monster Beverage Corp | Lassonde Industries 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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