Correlation Between Monster Beverage and Array Digital

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

Diversification Opportunities for Monster Beverage and Array Digital

-0.22

Correlation Coefficient

Monster Beverage  Array Digital

Very good diversification

The 3 months correlation between Monster and Array is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Array Digital Infrastructure, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Array Digital Infras 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 Array Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Array Digital Infras has no effect on the direction of Monster Beverage i.e., Monster Beverage and Array Digital go up and down completely randomly.

Pair Corralation between Monster Beverage and Array Digital

Given the investment horizon of 90 days Monster Beverage Corp is expected to under-perform the Array Digital. But the stock apears to be less risky and, when comparing its historical volatility, Monster Beverage Corp is 1.21 times less risky than Array Digital. The stock trades about -0.02 of its potential returns per unit of risk. The Array Digital Infrastructure, is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,413  in Array Digital Infrastructure, on May 26, 2025 and sell it today you would earn a total of  1,078  from holding Array Digital Infrastructure, or generate 24.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Monster Beverage Corp  vs.  Array Digital Infrastructure,

Monster Beverage Corp

Risk-Adjusted Performance

Weakest

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Array Digital Infras

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Array Digital Infrastructure, are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Array Digital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Monster Beverage and Array Digital

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

The idea behind Monster Beverage Corp and Array Digital Infrastructure, 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 CEOs Directory module to screen CEOs from public companies around the world.