Correlation Between Flowers Foods and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Flowers Foods 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 Flowers Foods and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flowers Foods and Molson Coors Brewing, you can compare the effects of market volatilities on Flowers Foods 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 Flowers Foods with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flowers Foods and Molson Coors.
Diversification Opportunities for Flowers Foods and Molson Coors
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flowers and Molson is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Flowers Foods and Molson Coors Brewing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Brewing and Flowers Foods 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 Flowers Foods 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 Brewing has no effect on the direction of Flowers Foods i.e., Flowers Foods and Molson Coors go up and down completely randomly.
Pair Corralation between Flowers Foods and Molson Coors
Considering the 90-day investment horizon Flowers Foods is expected to generate 3.73 times less return on investment than Molson Coors. But when comparing it to its historical volatility, Flowers Foods is 1.48 times less risky than Molson Coors. It trades about 0.09 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5,601 in Molson Coors Brewing on August 27, 2024 and sell it today you would earn a total of 435.00 from holding Molson Coors Brewing or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flowers Foods vs. Molson Coors Brewing
Performance |
| Timeline |
| Flowers Foods |
| Molson Coors Brewing |
Flowers Foods and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flowers Foods and Molson Coors
The main advantage of trading using opposite Flowers Foods and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flowers Foods 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.| Flowers Foods vs. ConAgra Foods | Flowers Foods vs. McCormick Company Incorporated | Flowers Foods vs. Campbell Soup | Flowers Foods vs. Kellanova |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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