Correlation Between SBM OFFSHORE and Molson Coors
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE 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 SBM OFFSHORE and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and Molson Coors Beverage, you can compare the effects of market volatilities on SBM OFFSHORE 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 SBM OFFSHORE with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and Molson Coors.
Diversification Opportunities for SBM OFFSHORE and Molson Coors
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SBM and Molson is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE 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 SBM OFFSHORE 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 SBM OFFSHORE 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 SBM OFFSHORE i.e., SBM OFFSHORE and Molson Coors go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and Molson Coors
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 1.29 times more return on investment than Molson Coors. However, SBM OFFSHORE is 1.29 times more volatile than Molson Coors Beverage. It trades about 0.15 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about -0.08 per unit of risk. If you would invest 1,678 in SBM OFFSHORE on October 30, 2024 and sell it today you would earn a total of 77.00 from holding SBM OFFSHORE or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM OFFSHORE vs. Molson Coors Beverage
Performance |
| Timeline |
| SBM OFFSHORE |
| Molson Coors Beverage |
SBM OFFSHORE and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and Molson Coors
The main advantage of trading using opposite SBM OFFSHORE and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE 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.| SBM OFFSHORE vs. VIVA WINE GROUP | SBM OFFSHORE vs. Perseus Mining Limited | SBM OFFSHORE vs. Broadcom | SBM OFFSHORE vs. Television Broadcasts Limited |
| Molson Coors vs. KINGBOARD CHEMICAL | Molson Coors vs. Keck Seng Investments | Molson Coors vs. Silicon Motion Technology | Molson Coors vs. Gladstone Investment |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |