Correlation Between Molson Coors and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Tsingtao Brewery 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 Tsingtao Brewery 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 Tsingtao Brewery, you can compare the effects of market volatilities on Molson Coors and Tsingtao Brewery 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 Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Tsingtao Brewery.
Diversification Opportunities for Molson Coors and Tsingtao Brewery
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Molson and Tsingtao is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery 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 Tsingtao Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsingtao Brewery has no effect on the direction of Molson Coors i.e., Molson Coors and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Molson Coors and Tsingtao Brewery
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 1.0 times more return on investment than Tsingtao Brewery. However, Molson Coors is 1.0 times more volatile than Tsingtao Brewery. It trades about 0.25 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about -0.03 per unit of risk. If you would invest 5,100 in Molson Coors Beverage on August 31, 2024 and sell it today you would earn a total of 682.00 from holding Molson Coors Beverage or generate 13.37% 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. Tsingtao Brewery
Performance |
| Timeline |
| Molson Coors Beverage |
| Tsingtao Brewery |
Molson Coors and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Tsingtao Brewery
The main advantage of trading using opposite Molson Coors and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Tsingtao Brewery 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 Tsingtao Brewery will offset losses from the drop in Tsingtao Brewery's long position.| Molson Coors vs. FORWARD AIR P | Molson Coors vs. BORR DRILLING NEW | Molson Coors vs. Consolidated Communications Holdings | Molson Coors vs. Charter Communications |
| Tsingtao Brewery vs. MELIA HOTELS | Tsingtao Brewery vs. CHIBA BANK | Tsingtao Brewery vs. The Hanover Insurance | Tsingtao Brewery vs. Ameriprise 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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