Correlation Between Molson Coors and Catena Media
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Catena Media 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 Catena Media 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 Catena Media PLC, you can compare the effects of market volatilities on Molson Coors and Catena Media 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 Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Catena Media.
Diversification Opportunities for Molson Coors and Catena Media
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Molson and Catena is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC 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 Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of Molson Coors i.e., Molson Coors and Catena Media go up and down completely randomly.
Pair Corralation between Molson Coors and Catena Media
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 0.44 times more return on investment than Catena Media. However, Molson Coors Beverage is 2.28 times less risky than Catena Media. It trades about 0.04 of its potential returns per unit of risk. Catena Media PLC is currently generating about -0.07 per unit of risk. If you would invest 4,936 in Molson Coors Beverage on August 30, 2024 and sell it today you would earn a total of 1,209 from holding Molson Coors Beverage or generate 24.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.17% |
| Values | Daily Returns |
Molson Coors Beverage vs. Catena Media PLC
Performance |
| Timeline |
| Molson Coors Beverage |
| Catena Media PLC |
Molson Coors and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Catena Media
The main advantage of trading using opposite Molson Coors and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Catena Media 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 Catena Media will offset losses from the drop in Catena Media's long position.| Molson Coors vs. Lendinvest PLC | Molson Coors vs. Neometals | Molson Coors vs. Albion Technology General | Molson Coors vs. Jupiter Fund Management |
| Catena Media vs. Lendinvest PLC | Catena Media vs. Neometals | Catena Media vs. Albion Technology General | Catena Media vs. Jupiter Fund Management |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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