Correlation Between Scandic Hotels and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Molson Coors 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 Scandic Hotels and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandic Hotels Group and Molson Coors Beverage, you can compare the effects of market volatilities on Scandic Hotels and Molson Coors 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 Scandic Hotels with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Molson Coors.
Diversification Opportunities for Scandic Hotels and Molson Coors
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scandic and Molson is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Molson Coors Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Beverage and Scandic Hotels 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 Scandic Hotels Group are associated (or correlated) with Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Beverage has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Molson Coors go up and down completely randomly.
Pair Corralation between Scandic Hotels and Molson Coors
Assuming the 90 days trading horizon Scandic Hotels Group is expected to under-perform the Molson Coors. In addition to that, Scandic Hotels is 1.01 times more volatile than Molson Coors Beverage. It trades about -0.06 of its total potential returns per unit of risk. Molson Coors Beverage is currently generating about 0.11 per unit of volatility. If you would invest 5,758 in Molson Coors Beverage on August 30, 2024 and sell it today you would earn a total of 387.00 from holding Molson Coors Beverage or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandic Hotels Group vs. Molson Coors Beverage
Performance |
| Timeline |
| Scandic Hotels Group |
| Molson Coors Beverage |
Scandic Hotels and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Molson Coors
The main advantage of trading using opposite Scandic Hotels and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' long position.| Scandic Hotels vs. Tungsten West PLC | Scandic Hotels vs. Argo Group Limited | Scandic Hotels vs. Hardide PLC | Scandic Hotels vs. Versarien PLC |
| Molson Coors vs. Tungsten West PLC | Molson Coors vs. Argo Group Limited | Molson Coors vs. Hardide PLC | Molson Coors vs. Versarien PLC |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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