Correlation Between Molson Coors and Federal Realty
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Federal Realty 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 Molson Coors and Federal Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molson Coors Beverage and Federal Realty Investment, you can compare the effects of market volatilities on Molson Coors and Federal Realty 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 Molson Coors with a short position of Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Federal Realty.
Diversification Opportunities for Molson Coors and Federal Realty
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Molson and Federal is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Federal Realty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Realty Investment and Molson Coors 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 Molson Coors Beverage are associated (or correlated) with Federal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Realty Investment has no effect on the direction of Molson Coors i.e., Molson Coors and Federal Realty go up and down completely randomly.
Pair Corralation between Molson Coors and Federal Realty
Assuming the 90 days trading horizon Molson Coors is expected to generate 2.63 times less return on investment than Federal Realty. In addition to that, Molson Coors is 1.52 times more volatile than Federal Realty Investment. It trades about 0.01 of its total potential returns per unit of risk. Federal Realty Investment is currently generating about 0.06 per unit of volatility. If you would invest 10,051 in Federal Realty Investment on September 14, 2024 and sell it today you would earn a total of 1,317 from holding Federal Realty Investment or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.38% |
| Values | Daily Returns |
Molson Coors Beverage vs. Federal Realty Investment
Performance |
| Timeline |
| Molson Coors Beverage |
| Federal Realty Investment |
Molson Coors and Federal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Federal Realty
The main advantage of trading using opposite Molson Coors and Federal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Federal Realty 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 Federal Realty will offset losses from the drop in Federal Realty's long position.| Molson Coors vs. Evolution Gaming Group | Molson Coors vs. Air Products Chemicals | Molson Coors vs. PureTech Health plc | Molson Coors vs. Universal Health Services |
| Federal Realty vs. Sparebank 1 SR | Federal Realty vs. MT Bank Corp | Federal Realty vs. Charter Communications Cl | Federal Realty vs. Discover Financial Services |
Check out your portfolio center.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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