Correlation Between Monster Beverage and Wallenius Wilhelmsen
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Wallenius Wilhelmsen 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 Wallenius Wilhelmsen 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 Wallenius Wilhelmsen ASA, you can compare the effects of market volatilities on Monster Beverage and Wallenius Wilhelmsen 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 Wallenius Wilhelmsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Wallenius Wilhelmsen.
Diversification Opportunities for Monster Beverage and Wallenius Wilhelmsen
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monster and Wallenius is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Wallenius Wilhelmsen ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallenius Wilhelmsen ASA 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 Wallenius Wilhelmsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wallenius Wilhelmsen ASA has no effect on the direction of Monster Beverage i.e., Monster Beverage and Wallenius Wilhelmsen go up and down completely randomly.
Pair Corralation between Monster Beverage and Wallenius Wilhelmsen
Assuming the 90 days trading horizon Monster Beverage Corp is expected to under-perform the Wallenius Wilhelmsen. But the stock apears to be less risky and, when comparing its historical volatility, Monster Beverage Corp is 2.29 times less risky than Wallenius Wilhelmsen. The stock trades about -0.31 of its potential returns per unit of risk. The Wallenius Wilhelmsen ASA is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 833.00 in Wallenius Wilhelmsen ASA on November 4, 2024 and sell it today you would lose (56.00) from holding Wallenius Wilhelmsen ASA or give up 6.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. Wallenius Wilhelmsen ASA
Performance |
| Timeline |
| Monster Beverage Corp |
| Wallenius Wilhelmsen ASA |
Monster Beverage and Wallenius Wilhelmsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and Wallenius Wilhelmsen
The main advantage of trading using opposite Monster Beverage and Wallenius Wilhelmsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Wallenius Wilhelmsen 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 Wallenius Wilhelmsen will offset losses from the drop in Wallenius Wilhelmsen's long position.| Monster Beverage vs. Khiron Life Sciences | Monster Beverage vs. UNIVERSAL MUSIC GROUP | Monster Beverage vs. CREO MEDICAL GRP | Monster Beverage vs. Warner Music Group |
| Wallenius Wilhelmsen vs. Safety Insurance Group | Wallenius Wilhelmsen vs. Scientific Games | Wallenius Wilhelmsen vs. DETALION GAMES SA | Wallenius Wilhelmsen vs. VIENNA INSURANCE GR |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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