Correlation Between MOLSON COORS and PENN Entertainment
Can any of the company-specific risk be diversified away by investing in both MOLSON COORS and PENN Entertainment 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 PENN Entertainment 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 PENN Entertainment, you can compare the effects of market volatilities on MOLSON COORS and PENN Entertainment 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 PENN Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOLSON COORS and PENN Entertainment.
Diversification Opportunities for MOLSON COORS and PENN Entertainment
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MOLSON and PENN is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding MOLSON RS BEVERAGE and PENN Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment 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 RS BEVERAGE are associated (or correlated) with PENN Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN Entertainment has no effect on the direction of MOLSON COORS i.e., MOLSON COORS and PENN Entertainment go up and down completely randomly.
Pair Corralation between MOLSON COORS and PENN Entertainment
Assuming the 90 days trading horizon MOLSON RS BEVERAGE is expected to generate 0.49 times more return on investment than PENN Entertainment. However, MOLSON RS BEVERAGE is 2.04 times less risky than PENN Entertainment. It trades about -0.01 of its potential returns per unit of risk. PENN Entertainment is currently generating about -0.02 per unit of risk. If you would invest 5,457 in MOLSON RS BEVERAGE on October 11, 2024 and sell it today you would lose (57.00) from holding MOLSON RS BEVERAGE or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.44% |
| Values | Daily Returns |
MOLSON RS BEVERAGE vs. PENN Entertainment
Performance |
| Timeline |
| MOLSON RS BEVERAGE |
| PENN Entertainment |
MOLSON COORS and PENN Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOLSON COORS and PENN Entertainment
The main advantage of trading using opposite MOLSON COORS and PENN Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOLSON COORS position performs unexpectedly, PENN Entertainment 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 PENN Entertainment will offset losses from the drop in PENN Entertainment's long position.| MOLSON COORS vs. China Resources Beer | MOLSON COORS vs. Superior Plus Corp | MOLSON COORS vs. NMI Holdings | MOLSON COORS vs. SIVERS SEMICONDUCTORS AB |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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