Correlation Between Molson Coors and Solid Impact

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Can any of the company-specific risk be diversified away by investing in both Molson Coors and Solid Impact 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 Solid Impact 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 Solid Impact Investments, you can compare the effects of market volatilities on Molson Coors and Solid Impact 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 Solid Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Solid Impact.

Diversification Opportunities for Molson Coors and Solid Impact

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Molson and Solid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Canada and Solid Impact Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Impact Investments 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 Solid Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Impact Investments has no effect on the direction of Molson Coors i.e., Molson Coors and Solid Impact go up and down completely randomly.

Pair Corralation between Molson Coors and Solid Impact

If you would invest  5.00  in Solid Impact Investments on September 14, 2024 and sell it today you would earn a total of  0.00  from holding Solid Impact Investments or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy72.73%
ValuesDaily Returns

Molson Coors Canada  vs.  Solid Impact Investments

 Performance 
       Timeline  
Molson Coors Canada 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Canada are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Molson Coors unveiled solid returns over the last few months and may actually be approaching a breakup point.
Solid Impact Investments 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Solid Impact Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Solid Impact is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Molson Coors and Solid Impact Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Molson Coors and Solid Impact

The main advantage of trading using opposite Molson Coors and Solid Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Solid Impact 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 Solid Impact will offset losses from the drop in Solid Impact's long position.
The idea behind Molson Coors Canada and Solid Impact Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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