Correlation Between Catalent and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Catalent 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 Catalent and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalent and Molson Coors Brewing, you can compare the effects of market volatilities on Catalent 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 Catalent with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalent and Molson Coors.
Diversification Opportunities for Catalent and Molson Coors
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Catalent and Molson is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Catalent 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 Catalent 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 Catalent 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 Catalent i.e., Catalent and Molson Coors go up and down completely randomly.
Pair Corralation between Catalent and Molson Coors
Given the investment horizon of 90 days Catalent is expected to generate 2.1 times more return on investment than Molson Coors. However, Catalent is 2.1 times more volatile than Molson Coors Brewing. It trades about 0.04 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about 0.04 per unit of risk. If you would invest 4,545 in Catalent on September 23, 2024 and sell it today you would earn a total of 1,803 from holding Catalent or generate 39.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.4% |
Values | Daily Returns |
Catalent vs. Molson Coors Brewing
Performance |
Timeline |
Catalent |
Molson Coors Brewing |
Catalent and Molson Coors Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catalent and Molson Coors
The main advantage of trading using opposite Catalent and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalent 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.Catalent vs. Oric Pharmaceuticals | Catalent vs. Lyra Therapeutics | Catalent vs. Inhibrx | Catalent vs. ESSA Pharma |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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