Correlation Between MOLSON RS and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both MOLSON RS and CHINA HUARONG 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 CHINA HUARONG 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 CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on MOLSON RS and CHINA HUARONG 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 CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOLSON RS and CHINA HUARONG.
Diversification Opportunities for MOLSON RS and CHINA HUARONG
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between MOLSON and CHINA is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding MOLSON RS BEVERAGE and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD 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 CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of MOLSON RS i.e., MOLSON RS and CHINA HUARONG go up and down completely randomly.
Pair Corralation between MOLSON RS and CHINA HUARONG
Assuming the 90 days trading horizon MOLSON RS is expected to generate 165.09 times less return on investment than CHINA HUARONG. But when comparing it to its historical volatility, MOLSON RS BEVERAGE is 16.85 times less risky than CHINA HUARONG. It trades about 0.01 of its potential returns per unit of risk. CHINA HUARONG ENERHD 50 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.05 in CHINA HUARONG ENERHD 50 on September 14, 2024 and sell it today you would earn a total of 0.10 from holding CHINA HUARONG ENERHD 50 or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOLSON RS BEVERAGE vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| MOLSON RS BEVERAGE |
| CHINA HUARONG ENERHD |
MOLSON RS and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOLSON RS and CHINA HUARONG
The main advantage of trading using opposite MOLSON RS and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOLSON RS position performs unexpectedly, CHINA HUARONG 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 CHINA HUARONG will offset losses from the drop in CHINA HUARONG'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 |
| CHINA HUARONG vs. Scandinavian Tobacco Group | CHINA HUARONG vs. Zoom Video Communications | CHINA HUARONG vs. WillScot Mobile Mini | CHINA HUARONG vs. Zurich Insurance Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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