Correlation Between Hansa Investment and Molson Coors

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

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

Diversification Opportunities for Hansa Investment and Molson Coors

0.15

Correlation Coefficient

Hansa Investment  Molson Coors

Average diversification

The 3 months correlation between Hansa and Molson is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Investment 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 Hansa Investment 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 Hansa Investment 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 Hansa Investment i.e., Hansa Investment and Molson Coors go up and down completely randomly.

Pair Corralation between Hansa Investment and Molson Coors

Assuming the 90 days trading horizon Hansa Investment is expected to generate 0.83 times more return on investment than Molson Coors. However, Hansa Investment is 1.21 times less risky than Molson Coors. It trades about 0.06 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about 0.01 per unit of risk. If you would invest  21,821  in Hansa Investment on November 29, 2024 and sell it today you would earn a total of  979.00  from holding Hansa Investment or generate 4.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Hansa Investment  vs.  Molson Coors Beverage

Hansa Investment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hansa Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Hansa Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Molson Coors Beverage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Molson Coors Beverage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Molson Coors is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hansa Investment and Molson Coors

The main advantage of trading using opposite Hansa Investment and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Investment 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 Hansa Investment and Molson Coors Beverage 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.