Correlation Between Molson Coors and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Hyatt Hotels 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 Molson Coors and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molson Coors Beverage and Hyatt Hotels, you can compare the effects of market volatilities on Molson Coors and Hyatt Hotels 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 Molson Coors with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Hyatt Hotels.
Diversification Opportunities for Molson Coors and Hyatt Hotels
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Molson and Hyatt is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and Molson Coors 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 Molson Coors Beverage are associated (or correlated) with Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of Molson Coors i.e., Molson Coors and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Molson Coors and Hyatt Hotels
Assuming the 90 days trading horizon Molson Coors Beverage is expected to under-perform the Hyatt Hotels. In addition to that, Molson Coors is 1.28 times more volatile than Hyatt Hotels. It trades about -0.01 of its total potential returns per unit of risk. Hyatt Hotels is currently generating about 0.1 per unit of volatility. If you would invest 14,190 in Hyatt Hotels on November 7, 2024 and sell it today you would earn a total of 1,075 from holding Hyatt Hotels or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. Hyatt Hotels
Performance |
| Timeline |
| Molson Coors Beverage |
| Hyatt Hotels |
Molson Coors and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Hyatt Hotels
The main advantage of trading using opposite Molson Coors and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Hyatt Hotels 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 Hyatt Hotels will offset losses from the drop in Hyatt Hotels' long position.| Molson Coors vs. Acadia Healthcare | Molson Coors vs. Altair Engineering | Molson Coors vs. SYSTEMAIR AB | Molson Coors vs. National Health Investors |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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