Correlation Between GEELY AUTOMOBILE and Molson Coors
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE 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 GEELY AUTOMOBILE and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and Molson Coors Beverage, you can compare the effects of market volatilities on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and Molson Coors.
Diversification Opportunities for GEELY AUTOMOBILE and Molson Coors
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GEELY and Molson is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and Molson Coors go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and Molson Coors
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 2.22 times more return on investment than Molson Coors. However, GEELY AUTOMOBILE is 2.22 times more volatile than Molson Coors Beverage. It trades about 0.14 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about 0.1 per unit of risk. If you would invest 92.00 in GEELY AUTOMOBILE on August 28, 2024 and sell it today you would earn a total of 66.00 from holding GEELY AUTOMOBILE or generate 71.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. Molson Coors Beverage
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| Molson Coors Beverage |
GEELY AUTOMOBILE and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and Molson Coors
The main advantage of trading using opposite GEELY AUTOMOBILE and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE 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.| GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Microsoft | GEELY AUTOMOBILE vs. Microsoft |
| Molson Coors vs. Universal Display | Molson Coors vs. Gamma Communications plc | Molson Coors vs. MI Homes | Molson Coors vs. CENTURIA OFFICE REIT |
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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