Correlation Between Sony Group and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both Sony Group and Monster Beverage 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 Sony Group and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group Corp and Monster Beverage Corp, you can compare the effects of market volatilities on Sony Group and Monster Beverage 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 Sony Group with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and Monster Beverage.
Diversification Opportunities for Sony Group and Monster Beverage
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sony and Monster is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and Monster Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monster Beverage Corp and Sony Group 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 Sony Group Corp are associated (or correlated) with Monster Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monster Beverage Corp has no effect on the direction of Sony Group i.e., Sony Group and Monster Beverage go up and down completely randomly.
Pair Corralation between Sony Group and Monster Beverage
Assuming the 90 days trading horizon Sony Group Corp is expected to generate 4.07 times more return on investment than Monster Beverage. However, Sony Group is 4.07 times more volatile than Monster Beverage Corp. It trades about 0.05 of its potential returns per unit of risk. Monster Beverage Corp is currently generating about 0.01 per unit of risk. If you would invest 776.00 in Sony Group Corp on August 31, 2024 and sell it today you would earn a total of 1,121 from holding Sony Group Corp or generate 144.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sony Group Corp vs. Monster Beverage Corp
Performance |
| Timeline |
| Sony Group Corp |
| Monster Beverage Corp |
Sony Group and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and Monster Beverage
The main advantage of trading using opposite Sony Group and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, Monster Beverage 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 Monster Beverage will offset losses from the drop in Monster Beverage's long position.| Sony Group vs. Apple Inc | Sony Group vs. Apple Inc | Sony Group vs. Samsung Electronics Co | Sony Group vs. Samsung Electronics Co |
| Monster Beverage vs. COSMOSTEEL HLDGS | Monster Beverage vs. CosmoSteel Holdings Limited | Monster Beverage vs. Khiron Life Sciences | Monster Beverage vs. Daido Steel Co |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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