Correlation Between Monster Beverage and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Kraft Heinz 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 Kraft Heinz 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 Kraft Heinz Co, you can compare the effects of market volatilities on Monster Beverage and Kraft Heinz 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 Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Kraft Heinz.
Diversification Opportunities for Monster Beverage and Kraft Heinz
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monster and Kraft is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz 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 Kraft Heinz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Heinz has no effect on the direction of Monster Beverage i.e., Monster Beverage and Kraft Heinz go up and down completely randomly.
Pair Corralation between Monster Beverage and Kraft Heinz
Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 1.18 times more return on investment than Kraft Heinz. However, Monster Beverage is 1.18 times more volatile than Kraft Heinz Co. It trades about 0.01 of its potential returns per unit of risk. Kraft Heinz Co is currently generating about -0.01 per unit of risk. If you would invest 5,044 in Monster Beverage Corp on September 14, 2024 and sell it today you would lose (9.00) from holding Monster Beverage Corp or give up 0.18% 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. Kraft Heinz Co
Performance |
| Timeline |
| Monster Beverage Corp |
| Kraft Heinz |
Monster Beverage and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Kraft Heinz
The main advantage of trading using opposite Monster Beverage and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Kraft Heinz 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 Kraft Heinz will offset losses from the drop in Kraft Heinz's long position.| Monster Beverage vs. DXC Technology Co | Monster Beverage vs. Renesas Electronics | Monster Beverage vs. AECOM TECHNOLOGY | Monster Beverage vs. Vishay Intertechnology |
| Kraft Heinz vs. WIMFARM SA EO | Kraft Heinz vs. RCM TECHNOLOGIES | Kraft Heinz vs. Penta Ocean Construction Co | Kraft Heinz vs. Dairy Farm International |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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