Correlation Between MOLSON COORS and SVENSKA CELLULO

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

By analyzing existing cross correlation between MOLSON RS BEVERAGE and SVENSKA CELLULO B , you can compare the effects of market volatilities on MOLSON COORS and SVENSKA CELLULO 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 MOLSON COORS with a short position of SVENSKA CELLULO. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOLSON COORS and SVENSKA CELLULO.

Diversification Opportunities for MOLSON COORS and SVENSKA CELLULO

0.32

Correlation Coefficient

MOLSON COORS  SVENSKA CELLULO

Weak diversification

The 3 months correlation between MOLSON and SVENSKA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding MOLSON RS BEVERAGE and SVENSKA CELLULO B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVENSKA CELLULO B and MOLSON COORS 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 MOLSON RS BEVERAGE are associated (or correlated) with SVENSKA CELLULO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVENSKA CELLULO B has no effect on the direction of MOLSON COORS i.e., MOLSON COORS and SVENSKA CELLULO go up and down completely randomly.

Pair Corralation between MOLSON COORS and SVENSKA CELLULO

Assuming the 90 days trading horizon MOLSON RS BEVERAGE is expected to generate 2.63 times more return on investment than SVENSKA CELLULO. However, MOLSON COORS is 2.63 times more volatile than SVENSKA CELLULO B . It trades about 0.1 of its potential returns per unit of risk. SVENSKA CELLULO B is currently generating about 0.14 per unit of risk. If you would invest  5,613  in MOLSON RS BEVERAGE on December 21, 2024 and sell it today you would earn a total of  987.00  from holding MOLSON RS BEVERAGE or generate 17.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.67%
Values	Daily Returns

MOLSON RS BEVERAGE  vs.  SVENSKA CELLULO B

MOLSON RS BEVERAGE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MOLSON RS BEVERAGE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, MOLSON COORS reported solid returns over the last few months and may actually be approaching a breakup point.

SVENSKA CELLULO B

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SVENSKA CELLULO B are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SVENSKA CELLULO may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with MOLSON COORS and SVENSKA CELLULO

The main advantage of trading using opposite MOLSON COORS and SVENSKA CELLULO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOLSON COORS position performs unexpectedly, SVENSKA CELLULO 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 SVENSKA CELLULO will offset losses from the drop in SVENSKA CELLULO's long position.

The idea behind MOLSON RS BEVERAGE and SVENSKA CELLULO B 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.