Correlation Between Molson Coors and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Omega Healthcare 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 Omega Healthcare 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 Omega Healthcare Investors, you can compare the effects of market volatilities on Molson Coors and Omega Healthcare 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 Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Omega Healthcare.
Diversification Opportunities for Molson Coors and Omega Healthcare
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Molson and Omega is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Omega Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Healthcare Inv 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 Omega Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Healthcare Inv has no effect on the direction of Molson Coors i.e., Molson Coors and Omega Healthcare go up and down completely randomly.
Pair Corralation between Molson Coors and Omega Healthcare
Assuming the 90 days trading horizon Molson Coors is expected to generate 1.32 times less return on investment than Omega Healthcare. In addition to that, Molson Coors is 1.18 times more volatile than Omega Healthcare Investors. It trades about 0.09 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.14 per unit of volatility. If you would invest 3,150 in Omega Healthcare Investors on September 4, 2024 and sell it today you would earn a total of 807.00 from holding Omega Healthcare Investors or generate 25.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Molson Coors Beverage vs. Omega Healthcare Investors
Performance |
| Timeline |
| Molson Coors Beverage |
| Omega Healthcare Inv |
Molson Coors and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Omega Healthcare
The main advantage of trading using opposite Molson Coors and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Omega Healthcare 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 Omega Healthcare will offset losses from the drop in Omega Healthcare's 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 |
| Omega Healthcare vs. Flow Traders NV | Omega Healthcare vs. Molson Coors Beverage | Omega Healthcare vs. Ebro Foods | Omega Healthcare vs. Premier Foods PLC |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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