Correlation Between DFS Furniture and Molson Coors
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and Molson Coors Beverage, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Molson Coors.
Diversification Opportunities for DFS Furniture and Molson Coors
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DFS and Molson is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC 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 DFS Furniture 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 DFS Furniture PLC 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 DFS Furniture i.e., DFS Furniture and Molson Coors go up and down completely randomly.
Pair Corralation between DFS Furniture and Molson Coors
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 0.84 times more return on investment than Molson Coors. However, DFS Furniture PLC is 1.18 times less risky than Molson Coors. It trades about -0.3 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about -0.51 per unit of risk. If you would invest 14,380 in DFS Furniture PLC on October 12, 2024 and sell it today you would lose (940.00) from holding DFS Furniture PLC or give up 6.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
DFS Furniture PLC vs. Molson Coors Beverage
Performance |
| Timeline |
| DFS Furniture PLC |
| Molson Coors Beverage |
DFS Furniture and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Molson Coors
The main advantage of trading using opposite DFS Furniture and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. Batm Advanced Communications | DFS Furniture vs. Ecclesiastical Insurance Office | DFS Furniture vs. LPKF Laser Electronics | DFS Furniture vs. Bankers Investment Trust |
| Molson Coors vs. Livermore Investments Group | Molson Coors vs. Lords Grp Trading | Molson Coors vs. DFS Furniture PLC | Molson Coors vs. Flow Traders NV |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stocks Directory Find actively traded stocks across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |