Correlation Between Park National and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Park National and Molson Coors 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 Park National and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park National and Molson Coors Brewing, you can compare the effects of market volatilities on Park National and Molson Coors 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 Park National with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park National and Molson Coors.
Diversification Opportunities for Park National and Molson Coors
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Park and Molson is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Park National and Molson Coors Brewing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Brewing and Park National 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 Park National are associated (or correlated) with Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Brewing has no effect on the direction of Park National i.e., Park National and Molson Coors go up and down completely randomly.
Pair Corralation between Park National and Molson Coors
Considering the 90-day investment horizon Park National is expected to under-perform the Molson Coors. In addition to that, Park National is 1.88 times more volatile than Molson Coors Brewing. It trades about -0.02 of its total potential returns per unit of risk. Molson Coors Brewing is currently generating about 0.0 per unit of volatility. If you would invest 5,538 in Molson Coors Brewing on October 29, 2024 and sell it today you would lose (22.00) from holding Molson Coors Brewing or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park National vs. Molson Coors Brewing
Performance |
| Timeline |
| Park National |
| Molson Coors Brewing |
Park National and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park National and Molson Coors
The main advantage of trading using opposite Park National and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park National position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' long position.| Park National vs. Peoples Bancorp | Park National vs. Lakeland Financial | Park National vs. NBT Bancorp | Park National vs. Trustmark |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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