Correlation Between Monster Beverage and UNIQA Insurance

Can any of the company-specific risk be diversified away by investing in both Monster Beverage and UNIQA Insurance 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 UNIQA Insurance 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 UNIQA Insurance Group, you can compare the effects of market volatilities on Monster Beverage and UNIQA Insurance 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 UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and UNIQA Insurance.

Diversification Opportunities for Monster Beverage and UNIQA Insurance

0.49

Correlation Coefficient

Monster Beverage  UNIQA Insurance

Very weak diversification

The 3 months correlation between Monster and UNIQA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and UNIQA Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQA Insurance Group 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 UNIQA Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIQA Insurance Group has no effect on the direction of Monster Beverage i.e., Monster Beverage and UNIQA Insurance go up and down completely randomly.

Pair Corralation between Monster Beverage and UNIQA Insurance

Assuming the 90 days trading horizon Monster Beverage Corp is expected to under-perform the UNIQA Insurance. In addition to that, Monster Beverage is 2.09 times more volatile than UNIQA Insurance Group. It trades about -0.04 of its total potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.0 per unit of volatility. If you would invest  767.00  in UNIQA Insurance Group on June 10, 2024 and sell it today you would lose (1.00) from holding UNIQA Insurance Group or give up 0.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.48%
Values	Daily Returns

Monster Beverage Corp  vs.  UNIQA Insurance Group

Monster Beverage Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monster Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Monster Beverage is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

UNIQA Insurance Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNIQA Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, UNIQA Insurance is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Monster Beverage and UNIQA Insurance

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

The idea behind Monster Beverage Corp and UNIQA Insurance Group 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.