Correlation Between Molson Coors and United States
Can any of the company-specific risk be diversified away by investing in both Molson Coors and United States 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 United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molson Coors Beverage and United States Steel, you can compare the effects of market volatilities on Molson Coors and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and United States.
Diversification Opportunities for Molson Coors and United States
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Molson and United is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 Coors Beverage are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Molson Coors i.e., Molson Coors and United States go up and down completely randomly.
Pair Corralation between Molson Coors and United States
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 0.29 times more return on investment than United States. However, Molson Coors Beverage is 3.42 times less risky than United States. It trades about 0.04 of its potential returns per unit of risk. United States Steel is currently generating about -0.15 per unit of risk. If you would invest 6,127 in Molson Coors Beverage on September 13, 2024 and sell it today you would earn a total of 62.00 from holding Molson Coors Beverage or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. United States Steel
Performance |
| Timeline |
| Molson Coors Beverage |
| United States Steel |
Molson Coors and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and United States
The main advantage of trading using opposite Molson Coors and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Molson Coors vs. Evolution Gaming Group | Molson Coors vs. Air Products Chemicals | Molson Coors vs. PureTech Health plc | Molson Coors vs. Universal Health Services |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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