Correlation Between CM Hospitalar and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both CM Hospitalar 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 CM Hospitalar and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CM Hospitalar SA and Monster Beverage, you can compare the effects of market volatilities on CM Hospitalar 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 CM Hospitalar with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM Hospitalar and Monster Beverage.
Diversification Opportunities for CM Hospitalar and Monster Beverage
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between VVEO3 and Monster is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar SA and Monster Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monster Beverage and CM Hospitalar 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 CM Hospitalar SA 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 has no effect on the direction of CM Hospitalar i.e., CM Hospitalar and Monster Beverage go up and down completely randomly.
Pair Corralation between CM Hospitalar and Monster Beverage
Assuming the 90 days trading horizon CM Hospitalar SA is expected to under-perform the Monster Beverage. In addition to that, CM Hospitalar is 1.96 times more volatile than Monster Beverage. It trades about -0.24 of its total potential returns per unit of risk. Monster Beverage is currently generating about -0.02 per unit of volatility. If you would invest 4,028 in Monster Beverage on September 13, 2024 and sell it today you would lose (45.00) from holding Monster Beverage or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CM Hospitalar SA vs. Monster Beverage
Performance |
| Timeline |
| CM Hospitalar SA |
| Monster Beverage |
CM Hospitalar and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM Hospitalar and Monster Beverage
The main advantage of trading using opposite CM Hospitalar and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM Hospitalar 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.| CM Hospitalar vs. Fundo Investimento Imobiliario | CM Hospitalar vs. LESTE FDO INV | CM Hospitalar vs. Fras le SA | CM Hospitalar vs. Western Digital |
| Monster Beverage vs. Cognizant Technology Solutions | Monster Beverage vs. Mitsubishi UFJ Financial | Monster Beverage vs. GX AI TECH | Monster Beverage vs. Align Technology |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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