Correlation Between Molson Coors and Walt Disney
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Walt Disney 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 Walt Disney 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 The Walt Disney, you can compare the effects of market volatilities on Molson Coors and Walt Disney 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 Walt Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Walt Disney.
Diversification Opportunities for Molson Coors and Walt Disney
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Molson and Walt is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and The Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney 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 Walt Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Molson Coors i.e., Molson Coors and Walt Disney go up and down completely randomly.
Pair Corralation between Molson Coors and Walt Disney
Assuming the 90 days trading horizon Molson Coors Beverage is expected to under-perform the Walt Disney. But the stock apears to be less risky and, when comparing its historical volatility, Molson Coors Beverage is 1.89 times less risky than Walt Disney. The stock trades about -0.11 of its potential returns per unit of risk. The The Walt Disney is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 9,609 in The Walt Disney on September 14, 2024 and sell it today you would earn a total of 1,345 from holding The Walt Disney or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. The Walt Disney
Performance |
| Timeline |
| Molson Coors Beverage |
| Walt Disney |
Molson Coors and Walt Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Walt Disney
The main advantage of trading using opposite Molson Coors and Walt Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Walt Disney 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 Walt Disney will offset losses from the drop in Walt Disney's long position.| Molson Coors vs. MOLSON RS BEVERAGE | Molson Coors vs. MeVis Medical Solutions | Molson Coors vs. Tyson Foods | Molson Coors vs. Apollo Medical Holdings |
| Walt Disney vs. Molson Coors Beverage | Walt Disney vs. Fevertree Drinks PLC | Walt Disney vs. United Breweries Co | Walt Disney vs. Motorcar Parts of |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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