Correlation Between Monster Beverage and Sweetgreen
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Sweetgreen 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 Sweetgreen 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 Sweetgreen, you can compare the effects of market volatilities on Monster Beverage and Sweetgreen 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 Sweetgreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Sweetgreen.
Diversification Opportunities for Monster Beverage and Sweetgreen
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monster and Sweetgreen is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen 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 Sweetgreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweetgreen has no effect on the direction of Monster Beverage i.e., Monster Beverage and Sweetgreen go up and down completely randomly.
Pair Corralation between Monster Beverage and Sweetgreen
Given the investment horizon of 90 days Monster Beverage Corp is expected to generate 0.36 times more return on investment than Sweetgreen. However, Monster Beverage Corp is 2.76 times less risky than Sweetgreen. It trades about -0.11 of its potential returns per unit of risk. Sweetgreen is currently generating about -0.04 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 (253.00) from holding Monster Beverage Corp or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Sweetgreen
Performance |
| Timeline |
| Monster Beverage Corp |
| Sweetgreen |
Monster Beverage and Sweetgreen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Sweetgreen
The main advantage of trading using opposite Monster Beverage and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Sweetgreen 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 Sweetgreen will offset losses from the drop in Sweetgreen'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 |
| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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