Correlation Between Molson Coors and Prime Dividend
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Prime Dividend 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 Prime Dividend 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 Prime Dividend Corp, you can compare the effects of market volatilities on Molson Coors and Prime Dividend 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 Prime Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Prime Dividend.
Diversification Opportunities for Molson Coors and Prime Dividend
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Molson and Prime is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Canada and Prime Dividend Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Dividend 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 Prime Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Dividend Corp has no effect on the direction of Molson Coors i.e., Molson Coors and Prime Dividend go up and down completely randomly.
Pair Corralation between Molson Coors and Prime Dividend
Assuming the 90 days trading horizon Molson Coors is expected to generate 3.83 times less return on investment than Prime Dividend. But when comparing it to its historical volatility, Molson Coors Canada is 1.28 times less risky than Prime Dividend. It trades about 0.03 of its potential returns per unit of risk. Prime Dividend Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 553.00 in Prime Dividend Corp on September 14, 2024 and sell it today you would earn a total of 326.00 from holding Prime Dividend Corp or generate 58.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 75.81% |
| Values | Daily Returns |
Molson Coors Canada vs. Prime Dividend Corp
Performance |
| Timeline |
| Molson Coors Canada |
| Prime Dividend Corp |
Molson Coors and Prime Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Prime Dividend
The main advantage of trading using opposite Molson Coors and Prime Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Prime Dividend 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 Prime Dividend will offset losses from the drop in Prime Dividend's long position.| Molson Coors vs. Maple Leaf Foods | Molson Coors vs. Saputo Inc | Molson Coors vs. Quebecor | Molson Coors vs. Lassonde Industries |
| Prime Dividend vs. Berkshire Hathaway CDR | Prime Dividend vs. E L Financial Corp | Prime Dividend vs. E L Financial 3 | Prime Dividend 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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