Correlation Between Molson Coors and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Host Hotels 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 Host Hotels 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 Host Hotels Resorts, you can compare the effects of market volatilities on Molson Coors and Host Hotels 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 Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Host Hotels.
Diversification Opportunities for Molson Coors and Host Hotels
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Molson and Host is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts 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 Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Molson Coors i.e., Molson Coors and Host Hotels go up and down completely randomly.
Pair Corralation between Molson Coors and Host Hotels
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 1.15 times more return on investment than Host Hotels. However, Molson Coors is 1.15 times more volatile than Host Hotels Resorts. It trades about 0.29 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.18 per unit of risk. If you would invest 5,573 in Molson Coors Beverage on September 4, 2024 and sell it today you would earn a total of 620.00 from holding Molson Coors Beverage or generate 11.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. Host Hotels Resorts
Performance |
| Timeline |
| Molson Coors Beverage |
| Host Hotels Resorts |
Molson Coors and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Host Hotels
The main advantage of trading using opposite Molson Coors and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Host Hotels 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 Host Hotels will offset losses from the drop in Host Hotels' long position.| Molson Coors vs. Samsung Electronics Co | Molson Coors vs. Samsung Electronics Co | Molson Coors vs. Hyundai Motor | Molson Coors vs. Toyota Motor Corp |
| Host Hotels vs. Zurich Insurance Group | Host Hotels vs. Synthomer plc | Host Hotels vs. Public Storage | Host Hotels vs. bet at home AG |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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