Correlation Between Monster Beverage and EBRO FOODS
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and EBRO FOODS 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 EBRO FOODS 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 EBRO FOODS, you can compare the effects of market volatilities on Monster Beverage and EBRO FOODS 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 EBRO FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and EBRO FOODS.
Diversification Opportunities for Monster Beverage and EBRO FOODS
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Monster and EBRO is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and EBRO FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBRO FOODS 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 EBRO FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBRO FOODS has no effect on the direction of Monster Beverage i.e., Monster Beverage and EBRO FOODS go up and down completely randomly.
Pair Corralation between Monster Beverage and EBRO FOODS
Assuming the 90 days trading horizon Monster Beverage is expected to generate 1.61 times less return on investment than EBRO FOODS. In addition to that, Monster Beverage is 1.01 times more volatile than EBRO FOODS. It trades about 0.01 of its total potential returns per unit of risk. EBRO FOODS is currently generating about 0.02 per unit of volatility. If you would invest 1,431 in EBRO FOODS on September 19, 2024 and sell it today you would earn a total of 159.00 from holding EBRO FOODS or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. EBRO FOODS
Performance |
| Timeline |
| Monster Beverage Corp |
| EBRO FOODS |
Monster Beverage and EBRO FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and EBRO FOODS
The main advantage of trading using opposite Monster Beverage and EBRO FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, EBRO FOODS 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 EBRO FOODS will offset losses from the drop in EBRO FOODS's long position.| Monster Beverage vs. Sunstone Hotel Investors | Monster Beverage vs. DALATA HOTEL | Monster Beverage vs. Chunghwa Telecom Co | Monster Beverage vs. Summit Hotel Properties |
| EBRO FOODS vs. UET United Electronic | EBRO FOODS vs. ELECTRONIC ARTS | EBRO FOODS vs. Nucletron Electronic Aktiengesellschaft | EBRO FOODS vs. Monster 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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