Correlation Between SunOpta and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both SunOpta 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 SunOpta and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Monster Beverage Corp, you can compare the effects of market volatilities on SunOpta 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 SunOpta with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Monster Beverage.
Diversification Opportunities for SunOpta and Monster Beverage
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SunOpta and Monster is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta 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 SunOpta 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 SunOpta 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 SunOpta i.e., SunOpta and Monster Beverage go up and down completely randomly.
Pair Corralation between SunOpta and Monster Beverage
Given the investment horizon of 90 days SunOpta is expected to generate 2.41 times more return on investment than Monster Beverage. However, SunOpta is 2.41 times more volatile than Monster Beverage Corp. It trades about 0.01 of its potential returns per unit of risk. Monster Beverage Corp is currently generating about 0.02 per unit of risk. If you would invest 877.00 in SunOpta on August 30, 2024 and sell it today you would lose (98.00) from holding SunOpta or give up 11.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Monster Beverage Corp
Performance |
| Timeline |
| SunOpta |
| Monster Beverage Corp |
SunOpta and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Monster Beverage
The main advantage of trading using opposite SunOpta and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta 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.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| Monster Beverage vs. Coca Cola Consolidated | Monster Beverage vs. Keurig Dr Pepper | Monster Beverage vs. PepsiCo | Monster Beverage vs. Coca Cola Femsa SAB |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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