Correlation Between Monster Beverage and Elysee Development
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Elysee Development 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 Elysee Development 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 Elysee Development Corp, you can compare the effects of market volatilities on Monster Beverage and Elysee Development 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 Elysee Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Elysee Development.
Diversification Opportunities for Monster Beverage and Elysee Development
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Monster and Elysee is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Elysee Development Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elysee Development Corp 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 Elysee Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elysee Development Corp has no effect on the direction of Monster Beverage i.e., Monster Beverage and Elysee Development go up and down completely randomly.
Pair Corralation between Monster Beverage and Elysee Development
Assuming the 90 days trading horizon Monster Beverage Corp is expected to generate 0.26 times more return on investment than Elysee Development. However, Monster Beverage Corp is 3.86 times less risky than Elysee Development. It trades about 0.17 of its potential returns per unit of risk. Elysee Development Corp is currently generating about -0.05 per unit of risk. If you would invest 4,856 in Monster Beverage Corp on August 31, 2024 and sell it today you would earn a total of 364.00 from holding Monster Beverage Corp or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Monster Beverage Corp vs. Elysee Development Corp
Performance |
| Timeline |
| Monster Beverage Corp |
| Elysee Development Corp |
Monster Beverage and Elysee Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Elysee Development
The main advantage of trading using opposite Monster Beverage and Elysee Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Elysee Development 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 Elysee Development will offset losses from the drop in Elysee Development's long position.| Monster Beverage vs. Tianjin Capital Environmental | Monster Beverage vs. Perma Fix Environmental Services | Monster Beverage vs. Warner Music Group | Monster Beverage vs. Zoom Video Communications |
| Elysee Development vs. BJs Restaurants | Elysee Development vs. VARIOUS EATERIES LS | Elysee Development vs. Suntory Beverage Food | Elysee Development vs. Monster Beverage Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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