Correlation Between Monster Beverage and MHP Hotel
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By analyzing existing cross correlation between Monster Beverage Corp and MHP Hotel AG, you can compare the effects of market volatilities on Monster Beverage and MHP Hotel 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 MHP Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and MHP Hotel.
Diversification Opportunities for Monster Beverage and MHP Hotel
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Monster and MHP is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and MHP Hotel AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MHP Hotel AG 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 MHP Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MHP Hotel AG has no effect on the direction of Monster Beverage i.e., Monster Beverage and MHP Hotel go up and down completely randomly.
Pair Corralation between Monster Beverage and MHP Hotel
Assuming the 90 days trading horizon Monster Beverage Corp is expected to under-perform the MHP Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Monster Beverage Corp is 2.97 times less risky than MHP Hotel. The stock trades about -0.11 of its potential returns per unit of risk. The MHP Hotel AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 113.00 in MHP Hotel AG on September 21, 2024 and sell it today you would earn a total of 4.00 from holding MHP Hotel AG or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. MHP Hotel AG
Performance |
| Timeline |
| Monster Beverage Corp |
| MHP Hotel AG |
Monster Beverage and MHP Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and MHP Hotel
The main advantage of trading using opposite Monster Beverage and MHP Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, MHP Hotel 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 MHP Hotel will offset losses from the drop in MHP Hotel's long position.| Monster Beverage vs. METHODE ELECTRONICS | Monster Beverage vs. Arrow Electronics | Monster Beverage vs. LPKF Laser Electronics | Monster Beverage vs. BANKINTER ADR 2007 |
| MHP Hotel vs. COLUMBIA SPORTSWEAR | MHP Hotel vs. Thai Beverage Public | MHP Hotel vs. USWE SPORTS AB | MHP Hotel 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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