Correlation Between Molson Coors and BT Group
Can any of the company-specific risk be diversified away by investing in both Molson Coors and BT Group 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 BT Group 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 BT Group Plc, you can compare the effects of market volatilities on Molson Coors and BT Group 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 BT Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and BT Group.
Diversification Opportunities for Molson Coors and BT Group
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Molson and BT-A is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and BT Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BT Group 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 BT Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BT Group Plc has no effect on the direction of Molson Coors i.e., Molson Coors and BT Group go up and down completely randomly.
Pair Corralation between Molson Coors and BT Group
Assuming the 90 days trading horizon Molson Coors Beverage is expected to under-perform the BT Group. But the stock apears to be less risky and, when comparing its historical volatility, Molson Coors Beverage is 1.25 times less risky than BT Group. The stock trades about 0.0 of its potential returns per unit of risk. The BT Group Plc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 15,404 in BT Group Plc on August 30, 2024 and sell it today you would earn a total of 446.00 from holding BT Group Plc or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.74% |
| Values | Daily Returns |
Molson Coors Beverage vs. BT Group Plc
Performance |
| Timeline |
| Molson Coors Beverage |
| BT Group Plc |
Molson Coors and BT Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and BT Group
The main advantage of trading using opposite Molson Coors and BT Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, BT Group 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 BT Group will offset losses from the drop in BT Group's long position.| Molson Coors vs. Lendinvest PLC | Molson Coors vs. Neometals | Molson Coors vs. Albion Technology General | Molson Coors vs. Jupiter Fund Management |
| BT Group vs. FC Investment Trust | BT Group vs. Coor Service Management | BT Group vs. STMicroelectronics NV | BT Group vs. Hansa Investment |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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