Correlation Between Monster Beverage and Contango ORE

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

Diversification Opportunities for Monster Beverage and Contango ORE

0.37

Correlation Coefficient

Monster Beverage  Contango ORE

Weak diversification

The 3 months correlation between Monster and Contango is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and Contango ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contango ORE 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 Contango ORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contango ORE has no effect on the direction of Monster Beverage i.e., Monster Beverage and Contango ORE go up and down completely randomly.

Pair Corralation between Monster Beverage and Contango ORE

Given the investment horizon of 90 days Monster Beverage is expected to generate 11.83 times less return on investment than Contango ORE. But when comparing it to its historical volatility, Monster Beverage Corp is 3.62 times less risky than Contango ORE. It trades about 0.05 of its potential returns per unit of risk. Contango ORE is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,338  in Contango ORE on May 1, 2025 and sell it today you would earn a total of  584.00  from holding Contango ORE or generate 43.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Monster Beverage Corp  vs.  Contango ORE

Monster Beverage Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Monster Beverage Corp are ranked lower than 3 (%) 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.

Contango ORE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Contango ORE are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Contango ORE displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Monster Beverage and Contango ORE

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

The idea behind Monster Beverage Corp and Contango ORE 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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.