Correlation Between Monster Beverage and SL Green
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and SL Green 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 SL Green 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 SL Green Realty, you can compare the effects of market volatilities on Monster Beverage and SL Green 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 SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and SL Green.
Diversification Opportunities for Monster Beverage and SL Green
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Monster and SLG is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of Monster Beverage i.e., Monster Beverage and SL Green go up and down completely randomly.
Pair Corralation between Monster Beverage and SL Green
Given the investment horizon of 90 days Monster Beverage is expected to generate 12.2 times less return on investment than SL Green. But when comparing it to its historical volatility, Monster Beverage Corp is 2.34 times less risky than SL Green. It trades about 0.01 of its potential returns per unit of risk. SL Green Realty is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,874 in SL Green Realty on September 12, 2024 and sell it today you would earn a total of 4,541 from holding SL Green Realty or generate 158.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. SL Green Realty
Performance |
| Timeline |
| Monster Beverage Corp |
| SL Green Realty |
Monster Beverage and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and SL Green
The main advantage of trading using opposite Monster Beverage and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, SL Green 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 SL Green will offset losses from the drop in SL Green'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 |
| SL Green vs. Boston Properties | SL Green vs. Douglas Emmett | SL Green vs. Kilroy Realty Corp | SL Green vs. Alexandria Real Estate |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| 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 | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |