Correlation Between Monster Beverage and Life Time
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Life Time 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 Life Time 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 Life Time Group, you can compare the effects of market volatilities on Monster Beverage and Life Time 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 Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Life Time.
Diversification Opportunities for Monster Beverage and Life Time
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Monster and Life is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Life Time Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Time Group 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 Life Time. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Time Group has no effect on the direction of Monster Beverage i.e., Monster Beverage and Life Time go up and down completely randomly.
Pair Corralation between Monster Beverage and Life Time
Given the investment horizon of 90 days Monster Beverage Corp is expected to generate 1.25 times more return on investment than Life Time. However, Monster Beverage is 1.25 times more volatile than Life Time Group. It trades about -0.12 of its potential returns per unit of risk. Life Time Group is currently generating about -0.2 per unit of risk. If you would invest 5,574 in Monster Beverage Corp on September 12, 2024 and sell it today you would lose (273.00) from holding Monster Beverage Corp or give up 4.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Life Time Group
Performance |
| Timeline |
| Monster Beverage Corp |
| Life Time Group |
Monster Beverage and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Life Time
The main advantage of trading using opposite Monster Beverage and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Life Time 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 Life Time will offset losses from the drop in Life Time'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 |
| Life Time vs. Planet Fitness | Life Time vs. Bowlero Corp | Life Time vs. JAKKS Pacific | Life Time vs. Acushnet Holdings 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |