Correlation Between Molson Coors and Premium Income
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Premium Income 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 Premium Income 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 Premium Income, you can compare the effects of market volatilities on Molson Coors and Premium Income 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 Premium Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Premium Income.
Diversification Opportunities for Molson Coors and Premium Income
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Molson and Premium is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Canada and Premium Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Income 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 Premium Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Income has no effect on the direction of Molson Coors i.e., Molson Coors and Premium Income go up and down completely randomly.
Pair Corralation between Molson Coors and Premium Income
Assuming the 90 days trading horizon Molson Coors Canada is expected to generate 1.14 times more return on investment than Premium Income. However, Molson Coors is 1.14 times more volatile than Premium Income. It trades about 0.03 of its potential returns per unit of risk. Premium Income is currently generating about -0.02 per unit of risk. If you would invest 8,026 in Molson Coors Canada on September 14, 2024 and sell it today you would earn a total of 634.00 from holding Molson Coors Canada or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.81% |
| Values | Daily Returns |
Molson Coors Canada vs. Premium Income
Performance |
| Timeline |
| Molson Coors Canada |
| Premium Income |
Molson Coors and Premium Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Premium Income
The main advantage of trading using opposite Molson Coors and Premium Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Premium Income 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 Premium Income will offset losses from the drop in Premium Income's long position.| Molson Coors vs. Maple Leaf Foods | Molson Coors vs. Saputo Inc | Molson Coors vs. Quebecor | Molson Coors vs. Lassonde Industries |
| Premium Income vs. Berkshire Hathaway CDR | Premium Income vs. E L Financial Corp | Premium Income vs. E L Financial 3 | Premium Income 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |