Correlation Between Vista Oil and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both Vista Oil 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 Vista Oil and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Oil Gas and Monster Beverage Corp, you can compare the effects of market volatilities on Vista Oil 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 Vista Oil with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Oil and Monster Beverage.
Diversification Opportunities for Vista Oil and Monster Beverage
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vista and Monster is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Vista Oil Gas 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 Vista Oil 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 Vista Oil Gas 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 Vista Oil i.e., Vista Oil and Monster Beverage go up and down completely randomly.
Pair Corralation between Vista Oil and Monster Beverage
Assuming the 90 days trading horizon Vista Oil Gas is expected to generate 1.86 times more return on investment than Monster Beverage. However, Vista Oil is 1.86 times more volatile than Monster Beverage Corp. It trades about 0.11 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 45,927 in Vista Oil Gas on November 6, 2024 and sell it today you would earn a total of 65,673 from holding Vista Oil Gas or generate 142.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vista Oil Gas vs. Monster Beverage Corp
Performance |
| Timeline |
| Vista Oil Gas |
| Monster Beverage Corp |
Vista Oil and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Oil and Monster Beverage
The main advantage of trading using opposite Vista Oil and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Oil 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.| Vista Oil vs. Air Transport Services | Vista Oil vs. New Oriental Education | Vista Oil vs. United Airlines Holdings | Vista Oil vs. DXC Technology |
| Monster Beverage vs. Hoteles City Express | Monster Beverage vs. McEwen Mining | Monster Beverage vs. United States Steel | Monster Beverage vs. United Airlines Holdings |
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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