Correlation Between Compal Electronics and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Compal Electronics 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 Compal Electronics and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compal Electronics GDR and Molson Coors Beverage, you can compare the effects of market volatilities on Compal Electronics 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 Compal Electronics with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Molson Coors.
Diversification Opportunities for Compal Electronics and Molson Coors
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and Molson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR 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 Compal Electronics 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 Compal Electronics GDR 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 Compal Electronics i.e., Compal Electronics and Molson Coors go up and down completely randomly.
Pair Corralation between Compal Electronics and Molson Coors
Assuming the 90 days trading horizon Compal Electronics is expected to generate 1.2 times less return on investment than Molson Coors. In addition to that, Compal Electronics is 1.16 times more volatile than Molson Coors Beverage. It trades about 0.01 of its total potential returns per unit of risk. Molson Coors Beverage is currently generating about 0.02 per unit of volatility. If you would invest 5,510 in Molson Coors Beverage on August 26, 2024 and sell it today you would earn a total of 537.00 from holding Molson Coors Beverage or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.57% |
| Values | Daily Returns |
Compal Electronics GDR vs. Molson Coors Beverage
Performance |
| Timeline |
| Compal Electronics GDR |
| Molson Coors Beverage |
Compal Electronics and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and Molson Coors
The main advantage of trading using opposite Compal Electronics and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics 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.| Compal Electronics vs. Samsung Electronics Co | Compal Electronics vs. Samsung Electronics Co | Compal Electronics vs. Hyundai Motor | Compal Electronics vs. Toyota Motor Corp |
| Molson Coors vs. Samsung Electronics Co | Molson Coors vs. Samsung Electronics Co | Molson Coors vs. Hyundai Motor | Molson Coors vs. Toyota Motor Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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