Correlation Between Molson Coors and PENN NATL
Can any of the company-specific risk be diversified away by investing in both Molson Coors and PENN NATL 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 PENN NATL 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 PENN NATL GAMING, you can compare the effects of market volatilities on Molson Coors and PENN NATL 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 PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and PENN NATL.
Diversification Opportunities for Molson Coors and PENN NATL
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Molson and PENN is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING 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 PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of Molson Coors i.e., Molson Coors and PENN NATL go up and down completely randomly.
Pair Corralation between Molson Coors and PENN NATL
Assuming the 90 days trading horizon Molson Coors Beverage is expected to under-perform the PENN NATL. But the stock apears to be less risky and, when comparing its historical volatility, Molson Coors Beverage is 2.17 times less risky than PENN NATL. The stock trades about -0.01 of its potential returns per unit of risk. The PENN NATL GAMING is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,965 in PENN NATL GAMING on November 1, 2024 and sell it today you would lose (32.00) from holding PENN NATL GAMING or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. PENN NATL GAMING
Performance |
| Timeline |
| Molson Coors Beverage |
| PENN NATL GAMING |
Molson Coors and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and PENN NATL
The main advantage of trading using opposite Molson Coors and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, PENN NATL 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 PENN NATL will offset losses from the drop in PENN NATL's long position.| Molson Coors vs. FRACTAL GAMING GROUP | Molson Coors vs. PKSHA TECHNOLOGY INC | Molson Coors vs. MOVIE GAMES SA | Molson Coors vs. GigaMedia |
| PENN NATL vs. American Airlines Group | PENN NATL vs. Direct Line Insurance | PENN NATL vs. BANKINTER ADR 2007 | PENN NATL vs. Webster Financial |
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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