Correlation Between Molson Coors and Sellas Life
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Sellas Life 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 Sellas Life 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 Sellas Life Sciences, you can compare the effects of market volatilities on Molson Coors and Sellas Life 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 Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Sellas Life.
Diversification Opportunities for Molson Coors and Sellas Life
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Molson and Sellas is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Sellas Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sellas Life Sciences 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 Sellas Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sellas Life Sciences has no effect on the direction of Molson Coors i.e., Molson Coors and Sellas Life go up and down completely randomly.
Pair Corralation between Molson Coors and Sellas Life
Considering the 90-day investment horizon Molson Coors Brewing is expected to generate 0.19 times more return on investment than Sellas Life. However, Molson Coors Brewing is 5.37 times less risky than Sellas Life. It trades about -0.09 of its potential returns per unit of risk. Sellas Life Sciences is currently generating about -0.5 per unit of risk. If you would invest 6,197 in Molson Coors Brewing on September 16, 2024 and sell it today you would lose (90.00) from holding Molson Coors Brewing or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Brewing vs. Sellas Life Sciences
Performance |
| Timeline |
| Molson Coors Brewing |
| Sellas Life Sciences |
Molson Coors and Sellas Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Sellas Life
The main advantage of trading using opposite Molson Coors and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Sellas Life 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 Sellas Life will offset losses from the drop in Sellas Life'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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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