Correlation Between Monster Beverage and HASBRO INC
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and HASBRO INC 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 HASBRO INC 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 HASBRO INC, you can compare the effects of market volatilities on Monster Beverage and HASBRO INC 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 HASBRO INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and HASBRO INC.
Diversification Opportunities for Monster Beverage and HASBRO INC
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Monster and HASBRO is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and HASBRO INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HASBRO INC 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 HASBRO INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HASBRO INC has no effect on the direction of Monster Beverage i.e., Monster Beverage and HASBRO INC go up and down completely randomly.
Pair Corralation between Monster Beverage and HASBRO INC
Assuming the 90 days trading horizon Monster Beverage is expected to generate 2.78 times less return on investment than HASBRO INC. But when comparing it to its historical volatility, Monster Beverage Corp is 1.41 times less risky than HASBRO INC. It trades about 0.02 of its potential returns per unit of risk. HASBRO INC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,877 in HASBRO INC on September 14, 2024 and sell it today you would earn a total of 1,214 from holding HASBRO INC or generate 24.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Monster Beverage Corp vs. HASBRO INC
Performance |
| Timeline |
| Monster Beverage Corp |
| HASBRO INC |
Monster Beverage and HASBRO INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and HASBRO INC
The main advantage of trading using opposite Monster Beverage and HASBRO INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, HASBRO INC 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 HASBRO INC will offset losses from the drop in HASBRO INC's long position.| Monster Beverage vs. DXC Technology Co | Monster Beverage vs. Renesas Electronics | Monster Beverage vs. AECOM TECHNOLOGY | Monster Beverage vs. Vishay Intertechnology |
| HASBRO INC vs. Monster Beverage Corp | HASBRO INC vs. Iridium Communications | HASBRO INC vs. SBA Communications Corp | HASBRO INC vs. Gamma Communications plc |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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