Correlation Between Molson Coors and Ferrexpo PLC
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Ferrexpo PLC 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 Ferrexpo PLC 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 Ferrexpo PLC, you can compare the effects of market volatilities on Molson Coors and Ferrexpo PLC 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 Ferrexpo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Ferrexpo PLC.
Diversification Opportunities for Molson Coors and Ferrexpo PLC
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Molson and Ferrexpo is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Ferrexpo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrexpo 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 Ferrexpo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrexpo PLC has no effect on the direction of Molson Coors i.e., Molson Coors and Ferrexpo PLC go up and down completely randomly.
Pair Corralation between Molson Coors and Ferrexpo PLC
Assuming the 90 days trading horizon Molson Coors is expected to generate 6.06 times less return on investment than Ferrexpo PLC. But when comparing it to its historical volatility, Molson Coors Beverage is 3.19 times less risky than Ferrexpo PLC. It trades about 0.03 of its potential returns per unit of risk. Ferrexpo PLC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,644 in Ferrexpo PLC on September 14, 2024 and sell it today you would earn a total of 3,316 from holding Ferrexpo PLC or generate 43.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.52% |
| Values | Daily Returns |
Molson Coors Beverage vs. Ferrexpo PLC
Performance |
| Timeline |
| Molson Coors Beverage |
| Ferrexpo PLC |
Molson Coors and Ferrexpo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Ferrexpo PLC
The main advantage of trading using opposite Molson Coors and Ferrexpo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Ferrexpo PLC 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 Ferrexpo PLC will offset losses from the drop in Ferrexpo PLC's long position.| Molson Coors vs. Evolution Gaming Group | Molson Coors vs. Air Products Chemicals | Molson Coors vs. PureTech Health plc | Molson Coors vs. Universal Health Services |
| Ferrexpo PLC vs. Roper Technologies | Ferrexpo PLC vs. MoneysupermarketCom Group PLC | Ferrexpo PLC vs. Addtech | Ferrexpo PLC vs. Molson Coors Beverage |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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