Correlation Between Hong Kong and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Hong Kong 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 Hong Kong and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Land and Molson Coors Beverage, you can compare the effects of market volatilities on Hong Kong 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 Hong Kong with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Molson Coors.
Diversification Opportunities for Hong Kong and Molson Coors
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hong and Molson is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land 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 Hong Kong 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 Hong Kong Land 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 Hong Kong i.e., Hong Kong and Molson Coors go up and down completely randomly.
Pair Corralation between Hong Kong and Molson Coors
Assuming the 90 days trading horizon Hong Kong is expected to generate 3.6 times less return on investment than Molson Coors. But when comparing it to its historical volatility, Hong Kong Land is 7.07 times less risky than Molson Coors. It trades about 0.12 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,667 in Molson Coors Beverage on December 30, 2024 and sell it today you would earn a total of 417.00 from holding Molson Coors Beverage or generate 7.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hong Kong Land vs. Molson Coors Beverage
Performance |
Timeline |
Hong Kong Land |
Molson Coors Beverage |
Hong Kong and Molson Coors Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hong Kong and Molson Coors
The main advantage of trading using opposite Hong Kong and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong 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.Hong Kong vs. AMG Advanced Metallurgical | Hong Kong vs. International Consolidated Airlines | Hong Kong vs. Solstad Offshore ASA | Hong Kong vs. Check Point Software |
Molson Coors vs. Alaska Air Group | Molson Coors vs. MTI Wireless Edge | Molson Coors vs. Porvair plc | Molson Coors vs. Gamma Communications PLC |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |