Correlation Between MOLSON RS and High Liner
Can any of the company-specific risk be diversified away by investing in both MOLSON RS and High Liner 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 RS and High Liner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOLSON RS BEVERAGE and High Liner Foods, you can compare the effects of market volatilities on MOLSON RS and High Liner 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 RS with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOLSON RS and High Liner.
Diversification Opportunities for MOLSON RS and High Liner
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MOLSON and High is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding MOLSON RS BEVERAGE and High Liner Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Liner Foods and MOLSON RS 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 RS BEVERAGE are associated (or correlated) with High Liner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Liner Foods has no effect on the direction of MOLSON RS i.e., MOLSON RS and High Liner go up and down completely randomly.
Pair Corralation between MOLSON RS and High Liner
Assuming the 90 days trading horizon MOLSON RS BEVERAGE is expected to under-perform the High Liner. But the stock apears to be less risky and, when comparing its historical volatility, MOLSON RS BEVERAGE is 1.16 times less risky than High Liner. The stock trades about -0.39 of its potential returns per unit of risk. The High Liner Foods is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,020 in High Liner Foods on October 25, 2024 and sell it today you would lose (20.00) from holding High Liner Foods or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOLSON RS BEVERAGE vs. High Liner Foods
Performance |
| Timeline |
| MOLSON RS BEVERAGE |
| High Liner Foods |
MOLSON RS and High Liner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOLSON RS and High Liner
The main advantage of trading using opposite MOLSON RS and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOLSON RS position performs unexpectedly, High Liner 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 High Liner will offset losses from the drop in High Liner's long position.| MOLSON RS vs. Scottish Mortgage Investment | MOLSON RS vs. CDL INVESTMENT | MOLSON RS vs. Keck Seng Investments | MOLSON RS vs. Cars Inc |
| High Liner vs. General Mills | High Liner vs. Danone SA | High Liner vs. Hormel Foods | High Liner vs. Kellogg Company |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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