Correlation Between Molson Coors and ScanSource
Can any of the company-specific risk be diversified away by investing in both Molson Coors and ScanSource 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 ScanSource 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 ScanSource, you can compare the effects of market volatilities on Molson Coors and ScanSource 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 ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and ScanSource.
Diversification Opportunities for Molson Coors and ScanSource
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Molson and ScanSource is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Molson Coors i.e., Molson Coors and ScanSource go up and down completely randomly.
Pair Corralation between Molson Coors and ScanSource
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 0.73 times more return on investment than ScanSource. However, Molson Coors Beverage is 1.38 times less risky than ScanSource. It trades about 0.18 of its potential returns per unit of risk. ScanSource is currently generating about 0.04 per unit of risk. If you would invest 4,780 in Molson Coors Beverage on August 29, 2024 and sell it today you would earn a total of 1,056 from holding Molson Coors Beverage or generate 22.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Molson Coors Beverage vs. ScanSource
Performance |
| Timeline |
| Molson Coors Beverage |
| ScanSource |
Molson Coors and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and ScanSource
The main advantage of trading using opposite Molson Coors and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.| Molson Coors vs. DiamondRock Hospitality | Molson Coors vs. Merit Medical Systems | Molson Coors vs. YOOMA WELLNESS INC | Molson Coors vs. Bumrungrad Hospital Public |
| ScanSource vs. WisdomTree Investments | ScanSource vs. COMBA TELECOM SYST | ScanSource vs. Cellnex Telecom SA | ScanSource vs. CDL INVESTMENT |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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