Correlation Between Monster Beverage and Coca-Cola European
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Coca-Cola European 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 Coca-Cola European 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 Coca Cola European Partners, you can compare the effects of market volatilities on Monster Beverage and Coca-Cola European 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 Coca-Cola European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Coca-Cola European.
Diversification Opportunities for Monster Beverage and Coca-Cola European
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Monster and Coca-Cola is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Coca Cola European Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola European 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 Coca-Cola European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola European has no effect on the direction of Monster Beverage i.e., Monster Beverage and Coca-Cola European go up and down completely randomly.
Pair Corralation between Monster Beverage and Coca-Cola European
Assuming the 90 days horizon Monster Beverage is expected to generate 4.01 times less return on investment than Coca-Cola European. In addition to that, Monster Beverage is 1.15 times more volatile than Coca Cola European Partners. It trades about 0.01 of its total potential returns per unit of risk. Coca Cola European Partners is currently generating about 0.06 per unit of volatility. If you would invest 4,982 in Coca Cola European Partners on September 28, 2024 and sell it today you would earn a total of 2,348 from holding Coca Cola European Partners or generate 47.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Coca Cola European Partners
Performance |
| Timeline |
| Monster Beverage Corp |
| Coca Cola European |
Monster Beverage and Coca-Cola European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Coca-Cola European
The main advantage of trading using opposite Monster Beverage and Coca-Cola European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Coca-Cola European 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 Coca-Cola European will offset losses from the drop in Coca-Cola European's long position.| Monster Beverage vs. Keurig Dr Pepper | Monster Beverage vs. Coca Cola European Partners | Monster Beverage vs. Coca Cola FEMSA SAB | Monster Beverage vs. National Beverage Corp |
| Coca-Cola European vs. Monster Beverage Corp | Coca-Cola European vs. Keurig Dr Pepper | Coca-Cola European vs. Coca Cola FEMSA SAB | Coca-Cola European vs. National Beverage 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |