Correlation Between Molson Coors and RCS MediaGroup
Can any of the company-specific risk be diversified away by investing in both Molson Coors and RCS MediaGroup 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 RCS MediaGroup 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 RCS MediaGroup SpA, you can compare the effects of market volatilities on Molson Coors and RCS MediaGroup 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 RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and RCS MediaGroup.
Diversification Opportunities for Molson Coors and RCS MediaGroup
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Molson and RCS is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and RCS MediaGroup SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCS MediaGroup SpA 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 RCS MediaGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCS MediaGroup SpA has no effect on the direction of Molson Coors i.e., Molson Coors and RCS MediaGroup go up and down completely randomly.
Pair Corralation between Molson Coors and RCS MediaGroup
Assuming the 90 days trading horizon Molson Coors is expected to generate 1.02 times less return on investment than RCS MediaGroup. But when comparing it to its historical volatility, Molson Coors Beverage is 1.07 times less risky than RCS MediaGroup. It trades about 0.24 of its potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 87.00 in RCS MediaGroup SpA on December 2, 2024 and sell it today you would earn a total of 11.00 from holding RCS MediaGroup SpA or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. RCS MediaGroup SpA
Performance |
| Timeline |
| Molson Coors Beverage |
| RCS MediaGroup SpA |
Molson Coors and RCS MediaGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and RCS MediaGroup
The main advantage of trading using opposite Molson Coors and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, RCS MediaGroup 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 RCS MediaGroup will offset losses from the drop in RCS MediaGroup's long position.| Molson Coors vs. Western Copper and | Molson Coors vs. East Africa Metals | Molson Coors vs. BROADSTNET LEADL 00025 | Molson Coors vs. Ringmetall SE |
| RCS MediaGroup vs. Dairy Farm International | RCS MediaGroup vs. Daito Trust Construction | RCS MediaGroup vs. Algonquin Power Utilities | RCS MediaGroup vs. Adtalem Global Education |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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