Correlation Between Molson Coors and Canadian General
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Canadian General 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 Canadian General 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 Canadian General Investments, you can compare the effects of market volatilities on Molson Coors and Canadian General 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 Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Canadian General.
Diversification Opportunities for Molson Coors and Canadian General
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Molson and Canadian is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General 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 Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Molson Coors i.e., Molson Coors and Canadian General go up and down completely randomly.
Pair Corralation between Molson Coors and Canadian General
Assuming the 90 days trading horizon Molson Coors is expected to generate 1.42 times less return on investment than Canadian General. In addition to that, Molson Coors is 1.21 times more volatile than Canadian General Investments. It trades about 0.02 of its total potential returns per unit of risk. Canadian General Investments is currently generating about 0.04 per unit of volatility. If you would invest 184,893 in Canadian General Investments on November 5, 2024 and sell it today you would earn a total of 48,107 from holding Canadian General Investments or generate 26.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.38% |
| Values | Daily Returns |
Molson Coors Beverage vs. Canadian General Investments
Performance |
| Timeline |
| Molson Coors Beverage |
| Canadian General Inv |
Molson Coors and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Canadian General
The main advantage of trading using opposite Molson Coors and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.| Molson Coors vs. Trainline Plc | Molson Coors vs. Amedeo Air Four | Molson Coors vs. Lindsell Train Investment | Molson Coors vs. Air Products Chemicals |
| Canadian General vs. Hochschild Mining plc | Canadian General vs. CleanTech Lithium plc | Canadian General vs. Evolution Gaming Group | Canadian General vs. Waste 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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