Correlation Between Molson Coors and National Vision
Can any of the company-specific risk be diversified away by investing in both Molson Coors and National Vision 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 National Vision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molson Coors Brewing and National Vision Holdings, you can compare the effects of market volatilities on Molson Coors and National Vision 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 National Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and National Vision.
Diversification Opportunities for Molson Coors and National Vision
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Molson and National is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and National Vision Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Vision Holdings 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 Coors Brewing are associated (or correlated) with National Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Vision Holdings has no effect on the direction of Molson Coors i.e., Molson Coors and National Vision go up and down completely randomly.
Pair Corralation between Molson Coors and National Vision
Considering the 90-day investment horizon Molson Coors is expected to generate 2.23 times less return on investment than National Vision. But when comparing it to its historical volatility, Molson Coors Brewing is 1.66 times less risky than National Vision. It trades about 0.23 of its potential returns per unit of risk. National Vision Holdings is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 979.00 in National Vision Holdings on August 26, 2024 and sell it today you would earn a total of 187.00 from holding National Vision Holdings or generate 19.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Brewing vs. National Vision Holdings
Performance |
| Timeline |
| Molson Coors Brewing |
| National Vision Holdings |
Molson Coors and National Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and National Vision
The main advantage of trading using opposite Molson Coors and National Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, National Vision 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 National Vision will offset losses from the drop in National Vision's long position.| Molson Coors vs. Budweiser Brewing | Molson Coors vs. Boston Beer | Molson Coors vs. Anheuser Busch InBev SANV | Molson Coors vs. Ambev SA ADR |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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