Correlation Between UBS Group and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both UBS 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 UBS 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 UBS Group AG and Monster Beverage Corp, you can compare the effects of market volatilities on UBS 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 UBS Group with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and Monster Beverage.
Diversification Opportunities for UBS Group and Monster Beverage
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between UBS and Monster is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG 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 UBS 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 UBS Group AG 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 UBS Group i.e., UBS Group and Monster Beverage go up and down completely randomly.
Pair Corralation between UBS Group and Monster Beverage
Assuming the 90 days trading horizon UBS Group AG is expected to generate 0.86 times more return on investment than Monster Beverage. However, UBS Group AG is 1.17 times less risky than Monster Beverage. It trades about 0.14 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 55,000 in UBS Group AG on November 3, 2024 and sell it today you would earn a total of 17,000 from holding UBS Group AG or generate 30.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS Group AG vs. Monster Beverage Corp
Performance |
| Timeline |
| UBS Group AG |
| Monster Beverage Corp |
UBS Group and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Group and Monster Beverage
The main advantage of trading using opposite UBS Group and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS 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.| UBS Group vs. Deutsche Bank Aktiengesellschaft | UBS Group vs. Grupo Sports World | UBS Group vs. Cognizant Technology Solutions | UBS Group vs. Desarrolladora Homex SAB |
| Monster Beverage vs. GMxico Transportes SAB | Monster Beverage vs. Grupo Sports World | Monster Beverage vs. Capital One Financial | Monster Beverage vs. First Majestic Silver |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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