Correlation Between MOLSON RS and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both MOLSON RS and CNH Industrial 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 CNH Industrial 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 CNH Industrial NV, you can compare the effects of market volatilities on MOLSON RS and CNH Industrial 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 CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOLSON RS and CNH Industrial.
Diversification Opportunities for MOLSON RS and CNH Industrial
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MOLSON and CNH is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding MOLSON RS BEVERAGE and CNH Industrial NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNH Industrial NV 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 CNH Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNH Industrial NV has no effect on the direction of MOLSON RS i.e., MOLSON RS and CNH Industrial go up and down completely randomly.
Pair Corralation between MOLSON RS and CNH Industrial
Assuming the 90 days trading horizon MOLSON RS is expected to generate 10.48 times less return on investment than CNH Industrial. But when comparing it to its historical volatility, MOLSON RS BEVERAGE is 1.42 times less risky than CNH Industrial. It trades about 0.06 of its potential returns per unit of risk. CNH Industrial NV is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 954.00 in CNH Industrial NV on September 14, 2024 and sell it today you would earn a total of 205.00 from holding CNH Industrial NV or generate 21.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOLSON RS BEVERAGE vs. CNH Industrial NV
Performance |
| Timeline |
| MOLSON RS BEVERAGE |
| CNH Industrial NV |
MOLSON RS and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOLSON RS and CNH Industrial
The main advantage of trading using opposite MOLSON RS and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOLSON RS position performs unexpectedly, CNH Industrial 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 CNH Industrial will offset losses from the drop in CNH Industrial's long position.| MOLSON RS vs. Superior Plus Corp | MOLSON RS vs. SIVERS SEMICONDUCTORS AB | MOLSON RS vs. NorAm Drilling AS | MOLSON RS vs. Norsk Hydro ASA |
| CNH Industrial vs. Burlington Stores | CNH Industrial vs. SPARTAN STORES | CNH Industrial vs. Collins Foods Limited | CNH Industrial 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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