Correlation Between Monster Beverage and Otsuka
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Otsuka 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 Otsuka 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 Otsuka, you can compare the effects of market volatilities on Monster Beverage and Otsuka 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 Otsuka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Otsuka.
Diversification Opportunities for Monster Beverage and Otsuka
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Monster and Otsuka is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Otsuka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otsuka 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 Otsuka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otsuka has no effect on the direction of Monster Beverage i.e., Monster Beverage and Otsuka go up and down completely randomly.
Pair Corralation between Monster Beverage and Otsuka
If you would invest 5,526 in Monster Beverage Corp on September 5, 2024 and sell it today you would lose (107.00) from holding Monster Beverage Corp or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Monster Beverage Corp vs. Otsuka
Performance |
| Timeline |
| Monster Beverage Corp |
| Otsuka |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Monster Beverage and Otsuka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Otsuka
The main advantage of trading using opposite Monster Beverage and Otsuka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Otsuka 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 Otsuka will offset losses from the drop in Otsuka's long position.| Monster Beverage vs. Celsius Holdings | Monster Beverage vs. Coca Cola Consolidated | Monster Beverage vs. Keurig Dr Pepper |
| Otsuka vs. The Cheesecake Factory | Otsuka vs. BJs Restaurants | Otsuka vs. PennantPark Investment | Otsuka vs. Cannae 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 Stocks Directory module to find actively traded stocks across global markets.
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