Correlation Between CHINA TELECOM and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both CHINA TELECOM 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 CHINA TELECOM and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA TELECOM H and Monster Beverage Corp, you can compare the effects of market volatilities on CHINA TELECOM 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 CHINA TELECOM with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TELECOM and Monster Beverage.
Diversification Opportunities for CHINA TELECOM and Monster Beverage
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between CHINA and Monster is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TELECOM H 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 CHINA TELECOM 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 CHINA TELECOM H 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 CHINA TELECOM i.e., CHINA TELECOM and Monster Beverage go up and down completely randomly.
Pair Corralation between CHINA TELECOM and Monster Beverage
Assuming the 90 days trading horizon CHINA TELECOM H is expected to generate 2.59 times more return on investment than Monster Beverage. However, CHINA TELECOM is 2.59 times more volatile than Monster Beverage Corp. It trades about 0.1 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 11.00 in CHINA TELECOM H on September 13, 2024 and sell it today you would earn a total of 41.00 from holding CHINA TELECOM H or generate 372.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
CHINA TELECOM H vs. Monster Beverage Corp
Performance |
| Timeline |
| CHINA TELECOM H |
| Monster Beverage Corp |
CHINA TELECOM and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TELECOM and Monster Beverage
The main advantage of trading using opposite CHINA TELECOM and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TELECOM 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.| CHINA TELECOM vs. Apple Inc | CHINA TELECOM vs. Apple Inc | CHINA TELECOM vs. Apple Inc | CHINA TELECOM vs. Apple Inc |
| Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |