Correlation Between National Vision and Molson Coors
Can any of the company-specific risk be diversified away by investing in both National Vision 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 National Vision and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Vision Holdings and Molson Coors Brewing, you can compare the effects of market volatilities on National Vision 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 National Vision with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Molson Coors.
Diversification Opportunities for National Vision and Molson Coors
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Molson is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Molson Coors Brewing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Brewing and National Vision 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 National Vision Holdings 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 Brewing has no effect on the direction of National Vision i.e., National Vision and Molson Coors go up and down completely randomly.
Pair Corralation between National Vision and Molson Coors
Considering the 90-day investment horizon National Vision Holdings is expected to generate 1.66 times more return on investment than Molson Coors. However, National Vision is 1.66 times more volatile than Molson Coors Brewing. It trades about 0.31 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about 0.23 per unit of risk. If you would invest 979.00 in National Vision Holdings on August 26, 2024 and sell it today you would earn a total of 187.00 from holding National Vision Holdings or generate 19.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Vision Holdings vs. Molson Coors Brewing
Performance |
| Timeline |
| National Vision Holdings |
| Molson Coors Brewing |
National Vision and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Molson Coors
The main advantage of trading using opposite National Vision and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision 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.| National Vision vs. Oriental Culture Holding | National Vision vs. Hour Loop | National Vision vs. Qurate Retail Series | National Vision vs. Emerge Commerce |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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