Correlation Between CATLIN GROUP and Molson Coors
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP 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 CATLIN GROUP and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Molson Coors Beverage, you can compare the effects of market volatilities on CATLIN GROUP 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 CATLIN GROUP with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Molson Coors.
Diversification Opportunities for CATLIN GROUP and Molson Coors
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CATLIN and Molson is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN 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 CATLIN GROUP 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 CATLIN 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 CATLIN GROUP i.e., CATLIN GROUP and Molson Coors go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Molson Coors
Assuming the 90 days trading horizon CATLIN GROUP is expected to under-perform the Molson Coors. But the stock apears to be less risky and, when comparing its historical volatility, CATLIN GROUP is 1.59 times less risky than Molson Coors. The stock trades about -0.11 of its potential returns per unit of risk. The Molson Coors Beverage is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,672 in Molson Coors Beverage on September 3, 2024 and sell it today you would earn a total of 547.00 from holding Molson Coors Beverage or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATLIN GROUP vs. Molson Coors Beverage
Performance |
| Timeline |
| CATLIN GROUP |
| Molson Coors Beverage |
CATLIN GROUP and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Molson Coors
The main advantage of trading using opposite CATLIN GROUP and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP 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.| CATLIN GROUP vs. Molson Coors Beverage | CATLIN GROUP vs. Flowtech Fluidpower plc | CATLIN GROUP vs. CleanTech Lithium plc | CATLIN GROUP vs. Monster Beverage Corp |
| Molson Coors vs. Catalyst Media Group | Molson Coors vs. CATLIN GROUP | Molson Coors vs. Magnora ASA | Molson Coors vs. RTW Venture Fund |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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