Correlation Between Molson Coors and Ecclesiastical Insurance
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Ecclesiastical Insurance 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 Ecclesiastical Insurance 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 Ecclesiastical Insurance Office, you can compare the effects of market volatilities on Molson Coors and Ecclesiastical Insurance 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 Ecclesiastical Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Ecclesiastical Insurance.
Diversification Opportunities for Molson Coors and Ecclesiastical Insurance
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Molson and Ecclesiastical is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Ecclesiastical Insurance Offic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecclesiastical Insurance 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 Ecclesiastical Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecclesiastical Insurance has no effect on the direction of Molson Coors i.e., Molson Coors and Ecclesiastical Insurance go up and down completely randomly.
Pair Corralation between Molson Coors and Ecclesiastical Insurance
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 2.1 times more return on investment than Ecclesiastical Insurance. However, Molson Coors is 2.1 times more volatile than Ecclesiastical Insurance Office. It trades about 0.03 of its potential returns per unit of risk. Ecclesiastical Insurance Office is currently generating about 0.03 per unit of risk. If you would invest 5,154 in Molson Coors Beverage on September 19, 2024 and sell it today you would earn a total of 770.00 from holding Molson Coors Beverage or generate 14.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.44% |
| Values | Daily Returns |
Molson Coors Beverage vs. Ecclesiastical Insurance Offic
Performance |
| Timeline |
| Molson Coors Beverage |
| Ecclesiastical Insurance |
Molson Coors and Ecclesiastical Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Ecclesiastical Insurance
The main advantage of trading using opposite Molson Coors and Ecclesiastical Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Ecclesiastical Insurance 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 Ecclesiastical Insurance will offset losses from the drop in Ecclesiastical Insurance's long position.| Molson Coors vs. Samsung Electronics Co | Molson Coors vs. Samsung Electronics Co | Molson Coors vs. Hyundai Motor | Molson Coors vs. Reliance Industries Ltd |
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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