Correlation Between Monster Beverage and Klöckner
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Klöckner 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 Klöckner 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 Klckner Co SE, you can compare the effects of market volatilities on Monster Beverage and Klöckner 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 Klöckner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Klöckner.
Diversification Opportunities for Monster Beverage and Klöckner
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monster and Klöckner is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Klckner Co SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klckner Co SE 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 Klöckner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klckner Co SE has no effect on the direction of Monster Beverage i.e., Monster Beverage and Klöckner go up and down completely randomly.
Pair Corralation between Monster Beverage and Klöckner
Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 0.83 times more return on investment than Klöckner. However, Monster Beverage Corp is 1.21 times less risky than Klöckner. It trades about 0.02 of its potential returns per unit of risk. Klckner Co SE is currently generating about -0.05 per unit of risk. If you would invest 5,020 in Monster Beverage Corp on September 3, 2024 and sell it today you would earn a total of 243.00 from holding Monster Beverage Corp or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Klckner Co SE
Performance |
| Timeline |
| Monster Beverage Corp |
| Klckner Co SE |
Monster Beverage and Klöckner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Klöckner
The main advantage of trading using opposite Monster Beverage and Klöckner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Klöckner 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 Klöckner will offset losses from the drop in Klöckner's long position.| Monster Beverage vs. Molson Coors Beverage | Monster Beverage vs. CarsalesCom | Monster Beverage vs. Thai Beverage Public | Monster Beverage vs. Fevertree Drinks PLC |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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