Correlation Between Molson Coors and Onex Corp
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Onex Corp 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 Onex Corp 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 Onex Corp, you can compare the effects of market volatilities on Molson Coors and Onex Corp 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 Onex Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Onex Corp.
Diversification Opportunities for Molson Coors and Onex Corp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Molson and Onex is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Canada and Onex Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onex 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 Onex Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onex Corp has no effect on the direction of Molson Coors i.e., Molson Coors and Onex Corp go up and down completely randomly.
Pair Corralation between Molson Coors and Onex Corp
Assuming the 90 days trading horizon Molson Coors Canada is expected to under-perform the Onex Corp. In addition to that, Molson Coors is 1.15 times more volatile than Onex Corp. It trades about -0.15 of its total potential returns per unit of risk. Onex Corp is currently generating about 0.06 per unit of volatility. If you would invest 10,927 in Onex Corp on October 22, 2024 and sell it today you would earn a total of 166.00 from holding Onex Corp or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.78% |
| Values | Daily Returns |
Molson Coors Canada vs. Onex Corp
Performance |
| Timeline |
| Molson Coors Canada |
| Onex Corp |
Molson Coors and Onex Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Onex Corp
The main advantage of trading using opposite Molson Coors and Onex Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Onex Corp 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 Onex Corp will offset losses from the drop in Onex Corp's long position.| Molson Coors vs. Maple Leaf Foods | Molson Coors vs. Saputo Inc | Molson Coors vs. Quebecor | Molson Coors vs. Lassonde Industries |
| Onex Corp vs. Intact Financial | Onex Corp vs. Open Text Corp | Onex Corp vs. Waste Connections | Onex Corp vs. Fairfax Financial Holdings |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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