Correlation Between Carsales and MOLSON COORS
Can any of the company-specific risk be diversified away by investing in both Carsales 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 Carsales and MOLSON COORS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and MOLSON RS BEVERAGE, you can compare the effects of market volatilities on Carsales 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 Carsales with a short position of MOLSON COORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carsales and MOLSON COORS.
Diversification Opportunities for Carsales and MOLSON COORS
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carsales and MOLSON is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE and Carsales 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 CarsalesCom 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 RS BEVERAGE has no effect on the direction of Carsales i.e., Carsales and MOLSON COORS go up and down completely randomly.
Pair Corralation between Carsales and MOLSON COORS
Assuming the 90 days horizon CarsalesCom is expected to generate 1.37 times more return on investment than MOLSON COORS. However, Carsales is 1.37 times more volatile than MOLSON RS BEVERAGE. It trades about 0.09 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about -0.35 per unit of risk. If you would invest 2,260 in CarsalesCom on October 20, 2024 and sell it today you would earn a total of 60.00 from holding CarsalesCom or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarsalesCom vs. MOLSON RS BEVERAGE
Performance |
| Timeline |
| CarsalesCom |
| MOLSON RS BEVERAGE |
Carsales and MOLSON COORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carsales and MOLSON COORS
The main advantage of trading using opposite Carsales and MOLSON COORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carsales 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's long position.| Carsales vs. Eidesvik Offshore ASA | Carsales vs. EIDESVIK OFFSHORE NK | Carsales vs. MOVIE GAMES SA | Carsales vs. COSTCO WHOLESALE CDR |
| MOLSON COORS vs. SCIENCE IN SPORT | MOLSON COORS vs. WT OFFSHORE | MOLSON COORS vs. USWE SPORTS AB | MOLSON COORS vs. Fukuyama Transporting Co |
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
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |