Correlation Between Molson Coors and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Virtus Investment 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 Virtus Investment 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 Virtus Investment Partners, you can compare the effects of market volatilities on Molson Coors and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Virtus Investment.
Diversification Opportunities for Molson Coors and Virtus Investment
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Molson and Virtus is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Virtus Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Molson Coors i.e., Molson Coors and Virtus Investment go up and down completely randomly.
Pair Corralation between Molson Coors and Virtus Investment
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 0.76 times more return on investment than Virtus Investment. However, Molson Coors Beverage is 1.31 times less risky than Virtus Investment. It trades about -0.14 of its potential returns per unit of risk. Virtus Investment Partners is currently generating about -0.3 per unit of risk. If you would invest 5,724 in Molson Coors Beverage on October 30, 2024 and sell it today you would lose (352.00) from holding Molson Coors Beverage or give up 6.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. Virtus Investment Partners
Performance |
| Timeline |
| Molson Coors Beverage |
| Virtus Investment |
Molson Coors and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Virtus Investment
The main advantage of trading using opposite Molson Coors and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment's long position.| Molson Coors vs. KINGBOARD CHEMICAL | Molson Coors vs. Keck Seng Investments | Molson Coors vs. Silicon Motion Technology | Molson Coors vs. Gladstone Investment |
| Virtus Investment vs. MPH Health Care | Virtus Investment vs. PATTIES FOODS | Virtus Investment vs. Phibro Animal Health | Virtus Investment vs. Cardinal Health |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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