Correlation Between Monster Beverage and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and BNP Paribas 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 BNP Paribas 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 BNP Paribas SA, you can compare the effects of market volatilities on Monster Beverage and BNP Paribas 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 BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and BNP Paribas.
Diversification Opportunities for Monster Beverage and BNP Paribas
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monster and BNP is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA 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 BNP Paribas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP Paribas SA has no effect on the direction of Monster Beverage i.e., Monster Beverage and BNP Paribas go up and down completely randomly.
Pair Corralation between Monster Beverage and BNP Paribas
Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 1.17 times more return on investment than BNP Paribas. However, Monster Beverage is 1.17 times more volatile than BNP Paribas SA. It trades about 0.05 of its potential returns per unit of risk. BNP Paribas SA is currently generating about -0.08 per unit of risk. If you would invest 4,792 in Monster Beverage Corp on September 1, 2024 and sell it today you would earn a total of 443.00 from holding Monster Beverage Corp or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
Monster Beverage Corp vs. BNP Paribas SA
Performance |
| Timeline |
| Monster Beverage Corp |
| BNP Paribas SA |
Monster Beverage and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and BNP Paribas
The main advantage of trading using opposite Monster Beverage and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, BNP Paribas 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 BNP Paribas will offset losses from the drop in BNP Paribas' long position.| Monster Beverage vs. SIVERS SEMICONDUCTORS AB | Monster Beverage vs. Darden Restaurants | Monster Beverage vs. Reliance Steel Aluminum | Monster Beverage vs. Q2M Managementberatung AG |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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