Correlation Between Molson Coors and Olympia Financial
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Olympia 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 Olympia 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 Olympia Financial Group, you can compare the effects of market volatilities on Molson Coors and Olympia 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 Olympia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Olympia Financial.
Diversification Opportunities for Molson Coors and Olympia Financial
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Molson and Olympia is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Canada and Olympia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympia Financial 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 Olympia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympia Financial has no effect on the direction of Molson Coors i.e., Molson Coors and Olympia Financial go up and down completely randomly.
Pair Corralation between Molson Coors and Olympia Financial
Assuming the 90 days trading horizon Molson Coors Canada is expected to generate 1.97 times more return on investment than Olympia Financial. However, Molson Coors is 1.97 times more volatile than Olympia Financial Group. It trades about 0.05 of its potential returns per unit of risk. Olympia Financial Group is currently generating about -0.04 per unit of risk. If you would invest 8,600 in Molson Coors Canada on September 13, 2024 and sell it today you would earn a total of 105.00 from holding Molson Coors Canada or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
Molson Coors Canada vs. Olympia Financial Group
Performance |
| Timeline |
| Molson Coors Canada |
| Olympia Financial |
Molson Coors and Olympia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Olympia Financial
The main advantage of trading using opposite Molson Coors and Olympia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Olympia 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 Olympia Financial will offset losses from the drop in Olympia Financial's long position.| Molson Coors vs. Maple Leaf Foods | Molson Coors vs. Saputo Inc | Molson Coors vs. Quebecor | Molson Coors vs. Lassonde Industries |
| Olympia Financial vs. Berkshire Hathaway CDR | Olympia Financial vs. E L Financial Corp | Olympia Financial vs. E L Financial 3 | Olympia 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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