Correlation Between Bell Food and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Bell Food 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 Bell Food and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Food Group and Molson Coors Beverage, you can compare the effects of market volatilities on Bell Food 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 Bell Food with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Food and Molson Coors.
Diversification Opportunities for Bell Food and Molson Coors
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bell and Molson is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bell Food 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 Bell Food 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 Bell Food 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 Bell Food i.e., Bell Food and Molson Coors go up and down completely randomly.
Pair Corralation between Bell Food and Molson Coors
Assuming the 90 days trading horizon Bell Food Group is expected to generate 0.52 times more return on investment than Molson Coors. However, Bell Food Group is 1.94 times less risky than Molson Coors. It trades about 0.02 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about -0.01 per unit of risk. If you would invest 26,500 in Bell Food Group on October 14, 2024 and sell it today you would earn a total of 250.00 from holding Bell Food Group or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Bell Food Group vs. Molson Coors Beverage
Performance |
| Timeline |
| Bell Food Group |
| Molson Coors Beverage |
Bell Food and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Food and Molson Coors
The main advantage of trading using opposite Bell Food and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Food 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.| Bell Food vs. Westlake Chemical Corp | Bell Food vs. Air Products Chemicals | Bell Food vs. Porvair plc | Bell Food vs. Fair Oaks Income |
| Molson Coors vs. Dairy Farm International | Molson Coors vs. Bell Food Group | Molson Coors vs. GoldMining | Molson Coors vs. Associated British Foods |
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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