Correlation Between MOLSON COORS and United Breweries
Can any of the company-specific risk be diversified away by investing in both MOLSON COORS and United Breweries 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 United Breweries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOLSON RS BEVERAGE and United Breweries Co, you can compare the effects of market volatilities on MOLSON COORS and United Breweries 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 United Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOLSON COORS and United Breweries.
Diversification Opportunities for MOLSON COORS and United Breweries
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MOLSON and United is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding MOLSON RS BEVERAGE and United Breweries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Breweries 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 RS BEVERAGE are associated (or correlated) with United Breweries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Breweries has no effect on the direction of MOLSON COORS i.e., MOLSON COORS and United Breweries go up and down completely randomly.
Pair Corralation between MOLSON COORS and United Breweries
Assuming the 90 days trading horizon MOLSON RS BEVERAGE is expected to generate 1.29 times more return on investment than United Breweries. However, MOLSON COORS is 1.29 times more volatile than United Breweries Co. It trades about 0.01 of its potential returns per unit of risk. United Breweries Co is currently generating about -0.03 per unit of risk. If you would invest 5,912 in MOLSON RS BEVERAGE on September 1, 2024 and sell it today you would lose (362.00) from holding MOLSON RS BEVERAGE or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOLSON RS BEVERAGE vs. United Breweries Co
Performance |
| Timeline |
| MOLSON RS BEVERAGE |
| United Breweries |
MOLSON COORS and United Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOLSON COORS and United Breweries
The main advantage of trading using opposite MOLSON COORS and United Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOLSON COORS position performs unexpectedly, United Breweries 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 United Breweries will offset losses from the drop in United Breweries' long position.| MOLSON COORS vs. G8 EDUCATION | MOLSON COORS vs. TAL Education Group | MOLSON COORS vs. IDP EDUCATION LTD | MOLSON COORS vs. Xinhua Winshare Publishing |
| United Breweries vs. TYSON FOODS A | United Breweries vs. Austevoll Seafood ASA | United Breweries vs. FUTURE GAMING GRP | United Breweries vs. THAI 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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