Correlation Between Molson Coors and Scottish American
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Scottish American 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 Scottish American 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 Scottish American Investment, you can compare the effects of market volatilities on Molson Coors and Scottish American 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 Scottish American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Scottish American.
Diversification Opportunities for Molson Coors and Scottish American
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Molson and Scottish is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Scottish American Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottish American 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 Scottish American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottish American has no effect on the direction of Molson Coors i.e., Molson Coors and Scottish American go up and down completely randomly.
Pair Corralation between Molson Coors and Scottish American
Assuming the 90 days trading horizon Molson Coors is expected to generate 1.37 times less return on investment than Scottish American. In addition to that, Molson Coors is 1.71 times more volatile than Scottish American Investment. It trades about 0.01 of its total potential returns per unit of risk. Scottish American Investment is currently generating about 0.03 per unit of volatility. If you would invest 47,293 in Scottish American Investment on September 12, 2024 and sell it today you would earn a total of 3,907 from holding Scottish American Investment or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.6% |
| Values | Daily Returns |
Molson Coors Beverage vs. Scottish American Investment
Performance |
| Timeline |
| Molson Coors Beverage |
| Scottish American |
Molson Coors and Scottish American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Scottish American
The main advantage of trading using opposite Molson Coors and Scottish American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Scottish American 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 Scottish American will offset losses from the drop in Scottish American's long position.| Molson Coors vs. Hong Kong Land | Molson Coors vs. Neometals | Molson Coors vs. Coor Service Management | Molson Coors vs. Fidelity Sustainable USD |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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