Correlation Between Wheaton Precious and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious 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 Wheaton Precious and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and Molson Coors Beverage, you can compare the effects of market volatilities on Wheaton Precious 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 Wheaton Precious with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Molson Coors.
Diversification Opportunities for Wheaton Precious and Molson Coors
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wheaton and Molson is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Molson Coors Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Beverage and Wheaton Precious 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 Wheaton Precious Metals 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 Beverage has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Molson Coors go up and down completely randomly.
Pair Corralation between Wheaton Precious and Molson Coors
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 1.46 times more return on investment than Molson Coors. However, Wheaton Precious is 1.46 times more volatile than Molson Coors Beverage. It trades about 0.05 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about 0.03 per unit of risk. If you would invest 317,254 in Wheaton Precious Metals on August 27, 2024 and sell it today you would earn a total of 190,746 from holding Wheaton Precious Metals or generate 60.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.42% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Molson Coors Beverage
Performance |
| Timeline |
| Wheaton Precious Metals |
| Molson Coors Beverage |
Wheaton Precious and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Molson Coors
The main advantage of trading using opposite Wheaton Precious and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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.| Wheaton Precious vs. Veolia Environnement VE | Wheaton Precious vs. Blackstone Loan Financing | Wheaton Precious vs. BE Semiconductor Industries | Wheaton Precious vs. CAP LEASE AVIATION |
| Molson Coors vs. Samsung Electronics Co | Molson Coors vs. Samsung Electronics Co | Molson Coors vs. Hyundai Motor | Molson Coors vs. Toyota Motor Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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