Correlation Between Molson Coors and Avicanna
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Avicanna 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 Avicanna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molson Coors Canada and Avicanna, you can compare the effects of market volatilities on Molson Coors and Avicanna 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 Avicanna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Avicanna.
Diversification Opportunities for Molson Coors and Avicanna
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Molson and Avicanna is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Canada and Avicanna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avicanna 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 Canada are associated (or correlated) with Avicanna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avicanna has no effect on the direction of Molson Coors i.e., Molson Coors and Avicanna go up and down completely randomly.
Pair Corralation between Molson Coors and Avicanna
Assuming the 90 days trading horizon Molson Coors Canada is expected to generate 0.27 times more return on investment than Avicanna. However, Molson Coors Canada is 3.7 times less risky than Avicanna. It trades about 0.02 of its potential returns per unit of risk. Avicanna is currently generating about -0.01 per unit of risk. If you would invest 8,267 in Molson Coors Canada on August 27, 2024 and sell it today you would earn a total of 135.00 from holding Molson Coors Canada or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 75.94% |
| Values | Daily Returns |
Molson Coors Canada vs. Avicanna
Performance |
| Timeline |
| Molson Coors Canada |
| Avicanna |
Molson Coors and Avicanna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Avicanna
The main advantage of trading using opposite Molson Coors and Avicanna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Avicanna 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 Avicanna will offset losses from the drop in Avicanna's long position.The idea behind Molson Coors Canada and Avicanna pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Avicanna vs. Auxly Cannabis Group | Avicanna vs. Entourage Health Corp | Avicanna vs. iShares Canadian HYBrid | Avicanna vs. Altagas Cum Red |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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