Correlation Between Monster Beverage and Xiabuxiabu Catering

Can any of the company-specific risk be diversified away by investing in both Monster Beverage and Xiabuxiabu Catering 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 Xiabuxiabu Catering into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Monster Beverage Corp and Xiabuxiabu Catering Management, you can compare the effects of market volatilities on Monster Beverage and Xiabuxiabu Catering 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 Xiabuxiabu Catering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and Xiabuxiabu Catering.

Diversification Opportunities for Monster Beverage and Xiabuxiabu Catering

-0.51

Correlation Coefficient

Monster Beverage  Xiabuxiabu Catering

Excellent diversification

The 3 months correlation between Monster and Xiabuxiabu is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Xiabuxiabu Catering Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiabuxiabu Catering 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 Corp are associated (or correlated) with Xiabuxiabu Catering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiabuxiabu Catering has no effect on the direction of Monster Beverage i.e., Monster Beverage and Xiabuxiabu Catering go up and down completely randomly.

Pair Corralation between Monster Beverage and Xiabuxiabu Catering

If you would invest  14.00  in Xiabuxiabu Catering Management on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Xiabuxiabu Catering Management or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Monster Beverage Corp  vs.  Xiabuxiabu Catering Management

Monster Beverage Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Monster Beverage Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Monster Beverage is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Xiabuxiabu Catering

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xiabuxiabu Catering Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Monster Beverage and Xiabuxiabu Catering

The main advantage of trading using opposite Monster Beverage and Xiabuxiabu Catering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, Xiabuxiabu Catering 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 Xiabuxiabu Catering will offset losses from the drop in Xiabuxiabu Catering's long position.

The idea behind Monster Beverage Corp and Xiabuxiabu Catering Management 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.