Correlation Between Molson Coors and Fortis
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Fortis 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 Fortis 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 Fortis Inc, you can compare the effects of market volatilities on Molson Coors and Fortis 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 Fortis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Fortis.
Diversification Opportunities for Molson Coors and Fortis
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Molson and Fortis is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Canada and Fortis Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortis Inc 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 Fortis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortis Inc has no effect on the direction of Molson Coors i.e., Molson Coors and Fortis go up and down completely randomly.
Pair Corralation between Molson Coors and Fortis
Assuming the 90 days trading horizon Molson Coors Canada is expected to generate 2.43 times more return on investment than Fortis. However, Molson Coors is 2.43 times more volatile than Fortis Inc. It trades about 0.4 of its potential returns per unit of risk. Fortis Inc is currently generating about 0.33 per unit of risk. If you would invest 7,643 in Molson Coors Canada on September 2, 2024 and sell it today you would earn a total of 1,057 from holding Molson Coors Canada or generate 13.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Molson Coors Canada vs. Fortis Inc
Performance |
| Timeline |
| Molson Coors Canada |
| Fortis Inc |
Molson Coors and Fortis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Fortis
The main advantage of trading using opposite Molson Coors and Fortis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Fortis 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 Fortis will offset losses from the drop in Fortis' long position.| Molson Coors vs. Maple Leaf Foods | Molson Coors vs. Saputo Inc | Molson Coors vs. Quebecor | Molson Coors vs. Lassonde Industries |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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