Correlation Between Consolidated Edison and MOLSON COORS
Can any of the company-specific risk be diversified away by investing in both Consolidated Edison 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 Consolidated Edison and MOLSON COORS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Edison and MOLSON RS BEVERAGE, you can compare the effects of market volatilities on Consolidated Edison 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 Consolidated Edison with a short position of MOLSON COORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Edison and MOLSON COORS.
Diversification Opportunities for Consolidated Edison and MOLSON COORS
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Consolidated and MOLSON is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Edison 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 Consolidated Edison 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 Consolidated Edison 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 Consolidated Edison i.e., Consolidated Edison and MOLSON COORS go up and down completely randomly.
Pair Corralation between Consolidated Edison and MOLSON COORS
Assuming the 90 days horizon Consolidated Edison is expected to generate 0.65 times more return on investment than MOLSON COORS. However, Consolidated Edison is 1.53 times less risky than MOLSON COORS. It trades about 0.31 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about -0.4 per unit of risk. If you would invest 8,624 in Consolidated Edison on October 24, 2024 and sell it today you would earn a total of 396.00 from holding Consolidated Edison or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consolidated Edison vs. MOLSON RS BEVERAGE
Performance |
| Timeline |
| Consolidated Edison |
| MOLSON RS BEVERAGE |
Consolidated Edison and MOLSON COORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Edison and MOLSON COORS
The main advantage of trading using opposite Consolidated Edison and MOLSON COORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Edison 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.| Consolidated Edison vs. MOLSON RS BEVERAGE | Consolidated Edison vs. Fortescue Metals Group | Consolidated Edison vs. Forsys Metals Corp | Consolidated Edison vs. PATTIES FOODS |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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