Correlation Between Monster Beverage and Ming Le
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Ming Le 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 Ming Le 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 Ming Le Sports, you can compare the effects of market volatilities on Monster Beverage and Ming Le 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 Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Ming Le.
Diversification Opportunities for Monster Beverage and Ming Le
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monster and Ming is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports 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 Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of Monster Beverage i.e., Monster Beverage and Ming Le go up and down completely randomly.
Pair Corralation between Monster Beverage and Ming Le
If you would invest 119.00 in Ming Le Sports on October 23, 2024 and sell it today you would earn a total of 0.00 from holding Ming Le Sports or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Ming Le Sports
Performance |
| Timeline |
| Monster Beverage Corp |
| Ming Le Sports |
Monster Beverage and Ming Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Ming Le
The main advantage of trading using opposite Monster Beverage and Ming Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Ming Le 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 Ming Le will offset losses from the drop in Ming Le's long position.| Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc |
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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