Correlation Between Campbell Soup and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Campbell Soup 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 Campbell Soup and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Campbell Soup and Molson Coors Beverage, you can compare the effects of market volatilities on Campbell Soup 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 Campbell Soup with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campbell Soup and Molson Coors.
Diversification Opportunities for Campbell Soup and Molson Coors
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Campbell and Molson is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Campbell Soup 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 Campbell Soup 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 Campbell Soup 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 Campbell Soup i.e., Campbell Soup and Molson Coors go up and down completely randomly.
Pair Corralation between Campbell Soup and Molson Coors
Considering the 90-day investment horizon Campbell Soup is expected to under-perform the Molson Coors. But the stock apears to be less risky and, when comparing its historical volatility, Campbell Soup is 2.78 times less risky than Molson Coors. The stock trades about -0.03 of its potential returns per unit of risk. The Molson Coors Beverage is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5,500 in Molson Coors Beverage on November 18, 2024 and sell it today you would earn a total of 676.00 from holding Molson Coors Beverage or generate 12.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Campbell Soup vs. Molson Coors Beverage
Performance |
| Timeline |
| Campbell Soup |
| Molson Coors Beverage |
Campbell Soup and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Campbell Soup and Molson Coors
The main advantage of trading using opposite Campbell Soup and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campbell Soup 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.| Campbell Soup vs. General Mills | Campbell Soup vs. Hormel Foods | Campbell Soup vs. Kellanova | Campbell Soup vs. Lamb Weston Holdings |
| Molson Coors vs. Compania Cervecerias Unidas | Molson Coors vs. Boston Beer | Molson Coors vs. Ambev SA ADR | Molson Coors vs. Molson Coors Brewing |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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