Correlation Between Monster Beverage and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES, you can compare the effects of market volatilities on Monster Beverage and SPARTAN STORES 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 SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and SPARTAN STORES.
Diversification Opportunities for Monster Beverage and SPARTAN STORES
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Monster and SPARTAN is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES 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 SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of Monster Beverage i.e., Monster Beverage and SPARTAN STORES go up and down completely randomly.
Pair Corralation between Monster Beverage and SPARTAN STORES
Assuming the 90 days trading horizon Monster Beverage Corp is expected to under-perform the SPARTAN STORES. In addition to that, Monster Beverage is 1.15 times more volatile than SPARTAN STORES. It trades about -0.07 of its total potential returns per unit of risk. SPARTAN STORES is currently generating about 0.18 per unit of volatility. If you would invest 1,739 in SPARTAN STORES on September 12, 2024 and sell it today you would earn a total of 111.00 from holding SPARTAN STORES or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Monster Beverage Corp vs. SPARTAN STORES
Performance |
| Timeline |
| Monster Beverage Corp |
| SPARTAN STORES |
Monster Beverage and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and SPARTAN STORES
The main advantage of trading using opposite Monster Beverage and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.| Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc |
| SPARTAN STORES vs. Wyndham Hotels Resorts | SPARTAN STORES vs. Luckin Coffee | SPARTAN STORES vs. InterContinental Hotels Group | SPARTAN STORES vs. Liberty Broadband |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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