Correlation Between Compagnie Plastic and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic 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 Compagnie Plastic and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and Molson Coors Brewing, you can compare the effects of market volatilities on Compagnie Plastic 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 Compagnie Plastic with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Molson Coors.
Diversification Opportunities for Compagnie Plastic and Molson Coors
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compagnie and Molson is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium 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 Compagnie Plastic 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 Compagnie Plastic Omnium 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 Compagnie Plastic i.e., Compagnie Plastic and Molson Coors go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Molson Coors
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to generate 1.96 times more return on investment than Molson Coors. However, Compagnie Plastic is 1.96 times more volatile than Molson Coors Brewing. It trades about 0.17 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about -0.09 per unit of risk. If you would invest 1,001 in Compagnie Plastic Omnium on November 7, 2024 and sell it today you would earn a total of 90.00 from holding Compagnie Plastic Omnium or generate 8.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Molson Coors Brewing
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Molson Coors Brewing |
Compagnie Plastic and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Molson Coors
The main advantage of trading using opposite Compagnie Plastic and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic 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.| Compagnie Plastic vs. GEAR4MUSIC LS 10 | Compagnie Plastic vs. CSSC Offshore Marine | Compagnie Plastic vs. PLAYMATES TOYS | Compagnie Plastic vs. TROPHY GAMES DEV |
| Molson Coors vs. Regal Hotels International | Molson Coors vs. Sterling Construction | Molson Coors vs. IMPERIAL TOBACCO | Molson Coors vs. China Railway Construction |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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