Correlation Between Molson Coors and SCI AG
Can any of the company-specific risk be diversified away by investing in both Molson Coors and SCI AG 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 SCI AG 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 SCI AG, you can compare the effects of market volatilities on Molson Coors and SCI AG 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 SCI AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and SCI AG.
Diversification Opportunities for Molson Coors and SCI AG
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Molson and SCI is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and SCI AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI AG 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 SCI AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI AG has no effect on the direction of Molson Coors i.e., Molson Coors and SCI AG go up and down completely randomly.
Pair Corralation between Molson Coors and SCI AG
Assuming the 90 days trading horizon Molson Coors is expected to generate 2.41 times less return on investment than SCI AG. But when comparing it to its historical volatility, Molson Coors Beverage is 2.45 times less risky than SCI AG. It trades about 0.12 of its potential returns per unit of risk. SCI AG is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,700 in SCI AG on September 12, 2024 and sell it today you would earn a total of 140.00 from holding SCI AG or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. SCI AG
Performance |
| Timeline |
| Molson Coors Beverage |
| SCI AG |
Molson Coors and SCI AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and SCI AG
The main advantage of trading using opposite Molson Coors and SCI AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, SCI AG 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 SCI AG will offset losses from the drop in SCI AG's long position.The idea behind Molson Coors Beverage and SCI AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SCI AG vs. SCANSOURCE | SCI AG vs. Evolution Mining Limited | SCI AG vs. Molson Coors Beverage | SCI AG vs. MOLSON RS 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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