Correlation Between Food Life and MOLSON COORS
Can any of the company-specific risk be diversified away by investing in both Food Life 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 Food Life and MOLSON COORS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Food Life Companies and MOLSON RS BEVERAGE, you can compare the effects of market volatilities on Food Life 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 Food Life with a short position of MOLSON COORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Food Life and MOLSON COORS.
Diversification Opportunities for Food Life and MOLSON COORS
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Food and MOLSON is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Food Life Companies and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE and Food Life 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 Food Life Companies 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 RS BEVERAGE has no effect on the direction of Food Life i.e., Food Life and MOLSON COORS go up and down completely randomly.
Pair Corralation between Food Life and MOLSON COORS
Assuming the 90 days horizon Food Life Companies is expected to generate 0.91 times more return on investment than MOLSON COORS. However, Food Life Companies is 1.1 times less risky than MOLSON COORS. It trades about 0.02 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about 0.0 per unit of risk. If you would invest 1,910 in Food Life Companies on September 4, 2024 and sell it today you would earn a total of 250.00 from holding Food Life Companies or generate 13.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Food Life Companies vs. MOLSON RS BEVERAGE
Performance |
| Timeline |
| Food Life Companies |
| MOLSON RS BEVERAGE |
Food Life and MOLSON COORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Food Life and MOLSON COORS
The main advantage of trading using opposite Food Life and MOLSON COORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Food Life 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's long position.| Food Life vs. McDonalds | Food Life vs. Chipotle Mexican Grill | Food Life vs. Superior Plus Corp | Food Life vs. NMI Holdings |
| MOLSON COORS vs. SPARTAN STORES | MOLSON COORS vs. Caseys General Stores | MOLSON COORS vs. KOOL2PLAY SA ZY | MOLSON COORS vs. Columbia Sportswear |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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