Correlation Between Molson Coors and STMICROELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Molson Coors and STMICROELECTRONICS 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 STMICROELECTRONICS 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 STMICROELECTRONICS, you can compare the effects of market volatilities on Molson Coors and STMICROELECTRONICS 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 STMICROELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and STMICROELECTRONICS.
Diversification Opportunities for Molson Coors and STMICROELECTRONICS
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Molson and STMICROELECTRONICS is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS 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 STMICROELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMICROELECTRONICS has no effect on the direction of Molson Coors i.e., Molson Coors and STMICROELECTRONICS go up and down completely randomly.
Pair Corralation between Molson Coors and STMICROELECTRONICS
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 1.17 times more return on investment than STMICROELECTRONICS. However, Molson Coors is 1.17 times more volatile than STMICROELECTRONICS. It trades about 0.22 of its potential returns per unit of risk. STMICROELECTRONICS is currently generating about -0.23 per unit of risk. If you would invest 5,156 in Molson Coors Beverage on August 28, 2024 and sell it today you would earn a total of 604.00 from holding Molson Coors Beverage or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. STMICROELECTRONICS
Performance |
| Timeline |
| Molson Coors Beverage |
| STMICROELECTRONICS |
Molson Coors and STMICROELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and STMICROELECTRONICS
The main advantage of trading using opposite Molson Coors and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, STMICROELECTRONICS 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 STMICROELECTRONICS will offset losses from the drop in STMICROELECTRONICS's long position.| Molson Coors vs. TSOGO SUN GAMING | Molson Coors vs. BOSTON BEER A | Molson Coors vs. Boyd Gaming | Molson Coors vs. Monster Beverage Corp |
| STMICROELECTRONICS vs. Molson Coors Beverage | STMICROELECTRONICS vs. National Beverage Corp | STMICROELECTRONICS vs. BE Semiconductor Industries | STMICROELECTRONICS vs. LION ONE METALS |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |