Correlation Between Molson Coors and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Airbus SE 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 Airbus SE 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 Airbus SE, you can compare the effects of market volatilities on Molson Coors and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Airbus SE.
Diversification Opportunities for Molson Coors and Airbus SE
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Molson and Airbus is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Molson Coors i.e., Molson Coors and Airbus SE go up and down completely randomly.
Pair Corralation between Molson Coors and Airbus SE
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 0.91 times more return on investment than Airbus SE. However, Molson Coors Beverage is 1.1 times less risky than Airbus SE. It trades about 0.11 of its potential returns per unit of risk. Airbus SE is currently generating about 0.01 per unit of risk. If you would invest 4,739 in Molson Coors Beverage on September 5, 2024 and sell it today you would earn a total of 1,091 from holding Molson Coors Beverage or generate 23.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. Airbus SE
Performance |
| Timeline |
| Molson Coors Beverage |
| Airbus SE |
Molson Coors and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Airbus SE
The main advantage of trading using opposite Molson Coors and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| Molson Coors vs. WisdomTree Investments | Molson Coors vs. VIAPLAY GROUP AB | Molson Coors vs. HK Electric Investments | Molson Coors vs. SLR Investment Corp |
| Airbus SE vs. Tyson Foods | Airbus SE vs. China Resources Beer | Airbus SE vs. United Natural Foods | Airbus SE vs. Molson Coors Beverage |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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