Correlation Between Monster Beverage and Elmos Semiconductor
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Elmos Semiconductor 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 Elmos Semiconductor 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 Elmos Semiconductor SE, you can compare the effects of market volatilities on Monster Beverage and Elmos Semiconductor 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 Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Elmos Semiconductor.
Diversification Opportunities for Monster Beverage and Elmos Semiconductor
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monster and Elmos is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor 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 Elmos Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elmos Semiconductor has no effect on the direction of Monster Beverage i.e., Monster Beverage and Elmos Semiconductor go up and down completely randomly.
Pair Corralation between Monster Beverage and Elmos Semiconductor
Assuming the 90 days trading horizon Monster Beverage is expected to generate 1.66 times less return on investment than Elmos Semiconductor. But when comparing it to its historical volatility, Monster Beverage Corp is 1.65 times less risky than Elmos Semiconductor. It trades about 0.01 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,290 in Elmos Semiconductor SE on November 4, 2024 and sell it today you would lose (190.00) from holding Elmos Semiconductor SE or give up 2.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Elmos Semiconductor SE
Performance |
| Timeline |
| Monster Beverage Corp |
| Elmos Semiconductor |
Monster Beverage and Elmos Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Elmos Semiconductor
The main advantage of trading using opposite Monster Beverage and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Elmos Semiconductor 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 Elmos Semiconductor will offset losses from the drop in Elmos Semiconductor's long position.| Monster Beverage vs. Taiwan Semiconductor Manufacturing | Monster Beverage vs. UPDATE SOFTWARE | Monster Beverage vs. PKSHA TECHNOLOGY INC | Monster Beverage vs. AECOM TECHNOLOGY |
| Elmos Semiconductor vs. NVIDIA | Elmos Semiconductor vs. NVIDIA | Elmos Semiconductor vs. Taiwan Semiconductor Manufacturing | Elmos Semiconductor vs. Texas Instruments Incorporated |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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