Correlation Between Monster Beverage and Mars Acquisition
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Mars Acquisition 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 Mars Acquisition 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 Mars Acquisition Corp, you can compare the effects of market volatilities on Monster Beverage and Mars Acquisition 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 Mars Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Mars Acquisition.
Diversification Opportunities for Monster Beverage and Mars Acquisition
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Monster and Mars is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition 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 Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Monster Beverage i.e., Monster Beverage and Mars Acquisition go up and down completely randomly.
Pair Corralation between Monster Beverage and Mars Acquisition
If you would invest 380.00 in Mars Acquisition Corp on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Mars Acquisition Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Mars Acquisition Corp
Performance |
| Timeline |
| Monster Beverage Corp |
| Mars Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Monster Beverage and Mars Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Mars Acquisition
The main advantage of trading using opposite Monster Beverage and Mars Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Mars Acquisition 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 Mars Acquisition will offset losses from the drop in Mars Acquisition'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 |
| Mars Acquisition vs. Qorvo Inc | Mars Acquisition vs. Skyworks Solutions | Mars Acquisition vs. Iridium Communications | Mars Acquisition vs. BE Semiconductor Industries |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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