Correlation Between METISA Metalrgica and Monster Beverage

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

By analyzing existing cross correlation between METISA Metalrgica Timboense and Monster Beverage, you can compare the effects of market volatilities on METISA Metalrgica 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 METISA Metalrgica with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of METISA Metalrgica and Monster Beverage.

Diversification Opportunities for METISA Metalrgica and Monster Beverage

-0.12

Correlation Coefficient

METISA Metalrgica  Monster Beverage

Good diversification

The 3 months correlation between METISA and Monster is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding METISA Metalrgica Timboense and Monster Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monster Beverage and METISA Metalrgica 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 METISA Metalrgica Timboense 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 has no effect on the direction of METISA Metalrgica i.e., METISA Metalrgica and Monster Beverage go up and down completely randomly.

Pair Corralation between METISA Metalrgica and Monster Beverage

Assuming the 90 days trading horizon METISA Metalrgica is expected to generate 8.38 times less return on investment than Monster Beverage. In addition to that, METISA Metalrgica is 1.16 times more volatile than Monster Beverage. It trades about 0.0 of its total potential returns per unit of risk. Monster Beverage is currently generating about 0.03 per unit of volatility. If you would invest  3,388  in Monster Beverage on April 20, 2025 and sell it today you would earn a total of  752.00  from holding Monster Beverage or generate 22.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

METISA Metalrgica Timboense  vs.  Monster Beverage

METISA Metalrgica

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in METISA Metalrgica Timboense are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, METISA Metalrgica may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Monster Beverage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Monster Beverage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Monster Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with METISA Metalrgica and Monster Beverage

The main advantage of trading using opposite METISA Metalrgica and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METISA Metalrgica 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.

The idea behind METISA Metalrgica Timboense and Monster Beverage 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 Global Correlations module to find global opportunities by holding instruments from different markets.