Correlation Between Heineken and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Heineken 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 Heineken and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heineken NV and Molson Coors Beverage, you can compare the effects of market volatilities on Heineken 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 Heineken with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken and Molson Coors.
Diversification Opportunities for Heineken and Molson Coors
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Heineken and Molson is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Heineken NV 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 Heineken 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 Heineken NV 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 Heineken i.e., Heineken and Molson Coors go up and down completely randomly.
Pair Corralation between Heineken and Molson Coors
Assuming the 90 days horizon Heineken NV is expected to generate 0.5 times more return on investment than Molson Coors. However, Heineken NV is 2.01 times less risky than Molson Coors. It trades about -0.06 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about -0.08 per unit of risk. If you would invest 6,900 in Heineken NV on November 9, 2024 and sell it today you would lose (133.00) from holding Heineken NV or give up 1.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heineken NV vs. Molson Coors Beverage
Performance |
| Timeline |
| Heineken NV |
| Molson Coors Beverage |
Heineken and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heineken and Molson Coors
The main advantage of trading using opposite Heineken and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heineken 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.| Heineken vs. Anheuser Busch InBev SANV | Heineken vs. Carlsberg AS | Heineken vs. Molson Coors Brewing | Heineken vs. Compania Cervecerias Unidas |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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