Correlation Between Molson Coors and CI Financial
Can any of the company-specific risk be diversified away by investing in both Molson Coors and CI Financial 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 CI Financial 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 CI Financial Corp, you can compare the effects of market volatilities on Molson Coors and CI Financial 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 CI Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and CI Financial.
Diversification Opportunities for Molson Coors and CI Financial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Molson and CIX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Canada and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp 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 CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of Molson Coors i.e., Molson Coors and CI Financial go up and down completely randomly.
Pair Corralation between Molson Coors and CI Financial
Assuming the 90 days trading horizon Molson Coors Canada is expected to under-perform the CI Financial. But the stock apears to be less risky and, when comparing its historical volatility, Molson Coors Canada is 4.38 times less risky than CI Financial. The stock trades about -0.11 of its potential returns per unit of risk. The CI Financial Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,340 in CI Financial Corp on September 14, 2024 and sell it today you would earn a total of 762.00 from holding CI Financial Corp or generate 32.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 72.73% |
| Values | Daily Returns |
Molson Coors Canada vs. CI Financial Corp
Performance |
| Timeline |
| Molson Coors Canada |
| CI Financial Corp |
Molson Coors and CI Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and CI Financial
The main advantage of trading using opposite Molson Coors and CI Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, CI Financial 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 CI Financial will offset losses from the drop in CI Financial's long position.| Molson Coors vs. Maple Leaf Foods | Molson Coors vs. Saputo Inc | Molson Coors vs. Quebecor | Molson Coors vs. Lassonde Industries |
| CI Financial vs. Berkshire Hathaway CDR | CI Financial vs. E L Financial Corp | CI Financial vs. E L Financial 3 | CI Financial vs. Molson Coors Canada |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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