Correlation Between Molson Coors and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Caledonia Mining 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 Caledonia Mining 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 Caledonia Mining, you can compare the effects of market volatilities on Molson Coors and Caledonia Mining 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 Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Caledonia Mining.
Diversification Opportunities for Molson Coors and Caledonia Mining
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Molson and Caledonia is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining 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 Caledonia Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caledonia Mining has no effect on the direction of Molson Coors i.e., Molson Coors and Caledonia Mining go up and down completely randomly.
Pair Corralation between Molson Coors and Caledonia Mining
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 0.56 times more return on investment than Caledonia Mining. However, Molson Coors Beverage is 1.79 times less risky than Caledonia Mining. It trades about 0.33 of its potential returns per unit of risk. Caledonia Mining is currently generating about -0.42 per unit of risk. If you would invest 5,507 in Molson Coors Beverage on September 2, 2024 and sell it today you would earn a total of 712.00 from holding Molson Coors Beverage or generate 12.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. Caledonia Mining
Performance |
| Timeline |
| Molson Coors Beverage |
| Caledonia Mining |
Molson Coors and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Caledonia Mining
The main advantage of trading using opposite Molson Coors and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Caledonia Mining 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 Caledonia Mining will offset losses from the drop in Caledonia Mining's long position.| Molson Coors vs. Uniper SE | Molson Coors vs. Mulberry Group PLC | Molson Coors vs. London Security Plc | Molson Coors vs. Triad Group PLC |
| Caledonia Mining vs. Givaudan SA | Caledonia Mining vs. Antofagasta PLC | Caledonia Mining vs. Centamin PLC | Caledonia Mining vs. Atalaya Mining |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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