Correlation Between Wheaton Precious and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious 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 Wheaton Precious and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and Monster Beverage Corp, you can compare the effects of market volatilities on Wheaton Precious 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 Wheaton Precious with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Monster Beverage.
Diversification Opportunities for Wheaton Precious and Monster Beverage
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wheaton and Monster is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals 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 Wheaton Precious 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 Wheaton Precious Metals 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 Wheaton Precious i.e., Wheaton Precious and Monster Beverage go up and down completely randomly.
Pair Corralation between Wheaton Precious and Monster Beverage
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 2.09 times more return on investment than Monster Beverage. However, Wheaton Precious is 2.09 times more volatile than Monster Beverage Corp. It trades about 0.15 of its potential returns per unit of risk. Monster Beverage Corp is currently generating about -0.54 per unit of risk. If you would invest 452,000 in Wheaton Precious Metals on October 26, 2024 and sell it today you would earn a total of 21,000 from holding Wheaton Precious Metals or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Monster Beverage Corp
Performance |
| Timeline |
| Wheaton Precious Metals |
| Monster Beverage Corp |
Wheaton Precious and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Monster Beverage
The main advantage of trading using opposite Wheaton Precious and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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.| Wheaton Precious vs. Givaudan SA | Wheaton Precious vs. Antofagasta PLC | Wheaton Precious vs. Ferrexpo PLC | Wheaton Precious vs. Atalaya Mining |
| Monster Beverage vs. Axway Software SA | Monster Beverage vs. Wheaton Precious Metals | Monster Beverage vs. Vitec Software Group | Monster Beverage vs. Bisichi Mining PLC |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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