Correlation Between HSBC Holdings and Molson Coors
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings 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 HSBC Holdings and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC Holdings plc and Molson Coors Beverage, you can compare the effects of market volatilities on HSBC Holdings 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 HSBC Holdings with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Molson Coors.
Diversification Opportunities for HSBC Holdings and Molson Coors
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HSBC and Molson is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings 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 HSBC Holdings 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 HSBC Holdings 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 HSBC Holdings i.e., HSBC Holdings and Molson Coors go up and down completely randomly.
Pair Corralation between HSBC Holdings and Molson Coors
If you would invest 7,259 in HSBC Holdings plc on October 12, 2024 and sell it today you would earn a total of 17.00 from holding HSBC Holdings plc or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC Holdings plc vs. Molson Coors Beverage
Performance |
| Timeline |
| HSBC Holdings plc |
| Molson Coors Beverage |
HSBC Holdings and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Molson Coors
The main advantage of trading using opposite HSBC Holdings and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings 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.| HSBC Holdings vs. Synchrony Financial | HSBC Holdings vs. Citizens Financial Group, | HSBC Holdings vs. GX AI TECH | HSBC Holdings vs. TechnipFMC plc |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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