Correlation Between Molson Coors and China Resources
Can any of the company-specific risk be diversified away by investing in both Molson Coors and China Resources 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 China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molson Coors Brewing and China Resources Beer, you can compare the effects of market volatilities on Molson Coors and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and China Resources.
Diversification Opportunities for Molson Coors and China Resources
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Molson and China is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer 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 Brewing are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Beer has no effect on the direction of Molson Coors i.e., Molson Coors and China Resources go up and down completely randomly.
Pair Corralation between Molson Coors and China Resources
Assuming the 90 days horizon Molson Coors Brewing is expected to generate 0.36 times more return on investment than China Resources. However, Molson Coors Brewing is 2.8 times less risky than China Resources. It trades about -0.21 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.11 per unit of risk. If you would invest 5,844 in Molson Coors Brewing on October 19, 2024 and sell it today you would lose (530.00) from holding Molson Coors Brewing or give up 9.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Brewing vs. China Resources Beer
Performance |
| Timeline |
| Molson Coors Brewing |
| China Resources Beer |
Molson Coors and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and China Resources
The main advantage of trading using opposite Molson Coors and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Molson Coors vs. Fomento Econmico Mexicano | Molson Coors vs. Anheuser Busch InBev SANV | Molson Coors vs. Anheuser Busch InBev SANV | Molson Coors vs. BUDWEISER BREWUNSPADR4 |
| China Resources vs. CN MODERN DAIRY | China Resources vs. THAI BEVERAGE | China Resources vs. GWILLI FOOD | China Resources vs. MTY Food Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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