Correlation Between NORTHEAST UTILITIES and MOLSON COORS
Can any of the company-specific risk be diversified away by investing in both NORTHEAST UTILITIES 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 NORTHEAST UTILITIES and MOLSON COORS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORTHEAST UTILITIES and MOLSON RS BEVERAGE, you can compare the effects of market volatilities on NORTHEAST UTILITIES 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 NORTHEAST UTILITIES with a short position of MOLSON COORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHEAST UTILITIES and MOLSON COORS.
Diversification Opportunities for NORTHEAST UTILITIES and MOLSON COORS
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NORTHEAST and MOLSON is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NORTHEAST UTILITIES and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE and NORTHEAST UTILITIES 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 NORTHEAST UTILITIES 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 RS BEVERAGE has no effect on the direction of NORTHEAST UTILITIES i.e., NORTHEAST UTILITIES and MOLSON COORS go up and down completely randomly.
Pair Corralation between NORTHEAST UTILITIES and MOLSON COORS
Assuming the 90 days trading horizon NORTHEAST UTILITIES is expected to generate 0.48 times more return on investment than MOLSON COORS. However, NORTHEAST UTILITIES is 2.11 times less risky than MOLSON COORS. It trades about 0.13 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about 0.03 per unit of risk. If you would invest 5,400 in NORTHEAST UTILITIES on November 7, 2024 and sell it today you would earn a total of 250.00 from holding NORTHEAST UTILITIES or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORTHEAST UTILITIES vs. MOLSON RS BEVERAGE
Performance |
| Timeline |
| NORTHEAST UTILITIES |
| MOLSON RS BEVERAGE |
NORTHEAST UTILITIES and MOLSON COORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORTHEAST UTILITIES and MOLSON COORS
The main advantage of trading using opposite NORTHEAST UTILITIES and MOLSON COORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHEAST UTILITIES 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's long position.| NORTHEAST UTILITIES vs. CORNISH METALS INC | NORTHEAST UTILITIES vs. MCEWEN MINING INC | NORTHEAST UTILITIES vs. Monster Beverage Corp | NORTHEAST UTILITIES vs. SAN MIGUEL BREWERY |
| MOLSON COORS vs. PLANT VEDA FOODS | MOLSON COORS vs. US FOODS HOLDING | MOLSON COORS vs. BE Semiconductor Industries | MOLSON COORS vs. TOREX SEMICONDUCTOR LTD |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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