Correlation Between Henderson High and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Henderson High 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 Henderson High and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson High Income and Molson Coors Beverage, you can compare the effects of market volatilities on Henderson High 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 Henderson High with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson High and Molson Coors.
Diversification Opportunities for Henderson High and Molson Coors
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Henderson and Molson is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Henderson High Income 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 Henderson High 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 Henderson High Income 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 Henderson High i.e., Henderson High and Molson Coors go up and down completely randomly.
Pair Corralation between Henderson High and Molson Coors
Assuming the 90 days trading horizon Henderson High is expected to generate 12.44 times less return on investment than Molson Coors. But when comparing it to its historical volatility, Henderson High Income is 1.86 times less risky than Molson Coors. It trades about 0.02 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,574 in Molson Coors Beverage on September 5, 2024 and sell it today you would earn a total of 631.00 from holding Molson Coors Beverage or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henderson High Income vs. Molson Coors Beverage
Performance |
| Timeline |
| Henderson High Income |
| Molson Coors Beverage |
Henderson High and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henderson High and Molson Coors
The main advantage of trading using opposite Henderson High and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson High 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.| Henderson High vs. Molson Coors Beverage | Henderson High vs. FC Investment Trust | Henderson High vs. Aurora Investment Trust | Henderson High vs. The Mercantile Investment |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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