Correlation Between Molson Coors and Freeport McMoRan
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Freeport McMoRan 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 Freeport McMoRan 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 Freeport McMoRan, you can compare the effects of market volatilities on Molson Coors and Freeport McMoRan 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 Freeport McMoRan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Freeport McMoRan.
Diversification Opportunities for Molson Coors and Freeport McMoRan
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Molson and Freeport is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Freeport McMoRan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeport McMoRan 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 Freeport McMoRan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeport McMoRan has no effect on the direction of Molson Coors i.e., Molson Coors and Freeport McMoRan go up and down completely randomly.
Pair Corralation between Molson Coors and Freeport McMoRan
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 0.74 times more return on investment than Freeport McMoRan. However, Molson Coors Beverage is 1.35 times less risky than Freeport McMoRan. It trades about 0.04 of its potential returns per unit of risk. Freeport McMoRan is currently generating about 0.01 per unit of risk. If you would invest 4,682 in Molson Coors Beverage on September 23, 2024 and sell it today you would earn a total of 1,204 from holding Molson Coors Beverage or generate 25.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.81% |
| Values | Daily Returns |
Molson Coors Beverage vs. Freeport McMoRan
Performance |
| Timeline |
| Molson Coors Beverage |
| Freeport McMoRan |
Molson Coors and Freeport McMoRan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Freeport McMoRan
The main advantage of trading using opposite Molson Coors and Freeport McMoRan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Freeport McMoRan 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 Freeport McMoRan will offset losses from the drop in Freeport McMoRan's long position.| Molson Coors vs. Uniper SE | Molson Coors vs. Mulberry Group PLC | Molson Coors vs. London Security Plc | Molson Coors vs. Triad Group PLC |
| Freeport McMoRan vs. Uniper SE | Freeport McMoRan vs. Mulberry Group PLC | Freeport McMoRan vs. London Security Plc | Freeport McMoRan vs. Triad Group 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 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.
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