Correlation Between United Guardian and Molson Coors
Can any of the company-specific risk be diversified away by investing in both United Guardian and Molson Coors 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 United Guardian and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Guardian and Molson Coors Brewing, you can compare the effects of market volatilities on United Guardian and Molson Coors 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 United Guardian with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and Molson Coors.
Diversification Opportunities for United Guardian and Molson Coors
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Molson is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Molson Coors Brewing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Brewing and United Guardian 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 United Guardian are associated (or correlated) with Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Brewing has no effect on the direction of United Guardian i.e., United Guardian and Molson Coors go up and down completely randomly.
Pair Corralation between United Guardian and Molson Coors
Allowing for the 90-day total investment horizon United Guardian is expected to under-perform the Molson Coors. In addition to that, United Guardian is 2.12 times more volatile than Molson Coors Brewing. It trades about -0.42 of its total potential returns per unit of risk. Molson Coors Brewing is currently generating about 0.24 per unit of volatility. If you would invest 5,601 in Molson Coors Brewing on August 28, 2024 and sell it today you would earn a total of 466.00 from holding Molson Coors Brewing or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Guardian vs. Molson Coors Brewing
Performance |
| Timeline |
| United Guardian |
| Molson Coors Brewing |
United Guardian and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Guardian and Molson Coors
The main advantage of trading using opposite United Guardian and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' long position.| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Psychemedics | United Guardian vs. Unity Bancorp |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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