Correlation Between U Power and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both U Power 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 U Power and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Power Limited and Monster Beverage Corp, you can compare the effects of market volatilities on U Power 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 U Power with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Monster Beverage.
Diversification Opportunities for U Power and Monster Beverage
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UCAR and Monster is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited 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 U Power 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 U Power Limited 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 U Power i.e., U Power and Monster Beverage go up and down completely randomly.
Pair Corralation between U Power and Monster Beverage
Given the investment horizon of 90 days U Power Limited is expected to generate 51.02 times more return on investment than Monster Beverage. However, U Power is 51.02 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 0.02 per unit of risk. If you would invest 0.00 in U Power Limited on August 30, 2024 and sell it today you would earn a total of 616.00 from holding U Power Limited or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.22% |
| Values | Daily Returns |
U Power Limited vs. Monster Beverage Corp
Performance |
| Timeline |
| U Power Limited |
| Monster Beverage Corp |
U Power and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Monster Beverage
The main advantage of trading using opposite U Power and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power 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.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| Monster Beverage vs. Vita Coco | Monster Beverage vs. PepsiCo | Monster Beverage vs. The Coca Cola | 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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