Correlation Between Gamehost and Molson Coors

Can any of the company-specific risk be diversified away by investing in both Gamehost 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 Gamehost and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gamehost and Molson Coors Canada, you can compare the effects of market volatilities on Gamehost 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 Gamehost with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamehost and Molson Coors.

Diversification Opportunities for Gamehost and Molson Coors

0.5

Correlation Coefficient

Gamehost  Molson Coors

Very weak diversification

The 3 months correlation between Gamehost and Molson is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gamehost and Molson Coors Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Canada and Gamehost 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 Gamehost 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 Canada has no effect on the direction of Gamehost i.e., Gamehost and Molson Coors go up and down completely randomly.

Pair Corralation between Gamehost and Molson Coors

Assuming the 90 days horizon Gamehost is expected to under-perform the Molson Coors. But the stock apears to be less risky and, when comparing its historical volatility, Gamehost is 1.21 times less risky than Molson Coors. The stock trades about -0.3 of its potential returns per unit of risk. The Molson Coors Canada is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  8,573  in Molson Coors Canada on September 20, 2024 and sell it today you would lose (127.00) from holding Molson Coors Canada or give up 1.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	72.73%
Values	Daily Returns

Gamehost  vs.  Molson Coors Canada

Gamehost

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamehost has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Gamehost is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Molson Coors Canada

Risk-Adjusted Performance

14 of 100

Good

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 uncertain basic indicators, Molson Coors unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gamehost and Molson Coors

The main advantage of trading using opposite Gamehost and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamehost 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.

The idea behind Gamehost and Molson Coors Canada 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.