Correlation Between Stardust Power and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Stardust Power 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 Stardust Power and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stardust Power and Molson Coors Brewing, you can compare the effects of market volatilities on Stardust Power 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 Stardust Power with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stardust Power and Molson Coors.
Diversification Opportunities for Stardust Power and Molson Coors
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stardust and Molson is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Stardust Power 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 Stardust Power 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 Stardust Power 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 Stardust Power i.e., Stardust Power and Molson Coors go up and down completely randomly.
Pair Corralation between Stardust Power and Molson Coors
Assuming the 90 days horizon Stardust Power is expected to generate 10.36 times more return on investment than Molson Coors. However, Stardust Power is 10.36 times more volatile than Molson Coors Brewing. It trades about 0.07 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about 0.04 per unit of risk. If you would invest 21.00 in Stardust Power on September 2, 2024 and sell it today you would earn a total of 1.00 from holding Stardust Power or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 18.15% |
| Values | Daily Returns |
Stardust Power vs. Molson Coors Brewing
Performance |
| Timeline |
| Stardust Power |
| Molson Coors Brewing |
Stardust Power and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stardust Power and Molson Coors
The main advantage of trading using opposite Stardust Power and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stardust Power 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.| Stardust Power vs. Amgen Inc | Stardust Power vs. Highway Holdings Limited | Stardust Power vs. Lipocine | Stardust Power vs. Griffon |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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