Correlation Between Molson Coors and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Bausch Health 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 Bausch Health 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 Bausch Health Companies, you can compare the effects of market volatilities on Molson Coors and Bausch Health 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 Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Bausch Health.
Diversification Opportunities for Molson Coors and Bausch Health
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Molson and Bausch is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies 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 Bausch Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of Molson Coors i.e., Molson Coors and Bausch Health go up and down completely randomly.
Pair Corralation between Molson Coors and Bausch Health
Assuming the 90 days trading horizon Molson Coors is expected to generate 1.4 times less return on investment than Bausch Health. But when comparing it to its historical volatility, Molson Coors Beverage is 2.48 times less risky than Bausch Health. It trades about 0.04 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 732.00 in Bausch Health Companies on October 15, 2024 and sell it today you would earn a total of 44.00 from holding Bausch Health Companies or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. Bausch Health Companies
Performance |
| Timeline |
| Molson Coors Beverage |
| Bausch Health Companies |
Molson Coors and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Bausch Health
The main advantage of trading using opposite Molson Coors and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Bausch Health 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 Bausch Health will offset losses from the drop in Bausch Health's long position.| Molson Coors vs. Shenandoah Telecommunications | Molson Coors vs. Cairo Communication SpA | Molson Coors vs. Monument Mining Limited | Molson Coors vs. IMPERIAL TOBACCO |
| Bausch Health vs. CSSC Offshore Marine | Bausch Health vs. Molson Coors Beverage | Bausch Health vs. PT Wintermar Offshore | Bausch Health vs. SBM OFFSHORE |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |