Correlation Between Monster Beverage and JD

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Can any of the company-specific risk be diversified away by investing in both Monster Beverage and JD 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 Monster Beverage and JD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monster Beverage and JD Inc, you can compare the effects of market volatilities on Monster Beverage and JD 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 Monster Beverage with a short position of JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and JD.

Diversification Opportunities for Monster Beverage and JD

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Monster and JD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage and JD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Inc and Monster Beverage 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 Monster Beverage are associated (or correlated) with JD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Inc has no effect on the direction of Monster Beverage i.e., Monster Beverage and JD go up and down completely randomly.

Pair Corralation between Monster Beverage and JD

If you would invest  3,546  in Monster Beverage on September 9, 2024 and sell it today you would earn a total of  418.00  from holding Monster Beverage or generate 11.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.56%
ValuesDaily Returns

Monster Beverage  vs.  JD Inc

 Performance 
       Timeline  
Monster Beverage 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Monster Beverage are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Monster Beverage may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JD Inc 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in JD Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, JD sustained solid returns over the last few months and may actually be approaching a breakup point.

Monster Beverage and JD Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Monster Beverage and JD

The main advantage of trading using opposite Monster Beverage and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, JD 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 JD will offset losses from the drop in JD's long position.
The idea behind Monster Beverage and JD Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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