Correlation Between Molson Coors and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both Molson Coors and FAST RETAIL 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 FAST RETAIL 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 FAST RETAIL ADR, you can compare the effects of market volatilities on Molson Coors and FAST RETAIL 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 FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and FAST RETAIL.
Diversification Opportunities for Molson Coors and FAST RETAIL
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Molson and FAST is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR 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 FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of Molson Coors i.e., Molson Coors and FAST RETAIL go up and down completely randomly.
Pair Corralation between Molson Coors and FAST RETAIL
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 0.52 times more return on investment than FAST RETAIL. However, Molson Coors Beverage is 1.9 times less risky than FAST RETAIL. It trades about -0.38 of its potential returns per unit of risk. FAST RETAIL ADR is currently generating about -0.23 per unit of risk. If you would invest 5,656 in Molson Coors Beverage on October 16, 2024 and sell it today you would lose (396.00) from holding Molson Coors Beverage or give up 7.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. FAST RETAIL ADR
Performance |
| Timeline |
| Molson Coors Beverage |
| FAST RETAIL ADR |
Molson Coors and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and FAST RETAIL
The main advantage of trading using opposite Molson Coors and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, FAST RETAIL 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 FAST RETAIL will offset losses from the drop in FAST RETAIL's long position.| Molson Coors vs. Shenandoah Telecommunications | Molson Coors vs. Cairo Communication SpA | Molson Coors vs. Monument Mining Limited | Molson Coors vs. IMPERIAL TOBACCO |
| FAST RETAIL vs. Fevertree Drinks PLC | FAST RETAIL vs. United Breweries Co | FAST RETAIL vs. NEW MILLENNIUM IRON | FAST RETAIL vs. Molson Coors Beverage |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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