Correlation Between PepsiCo and Molson Coors
Can any of the company-specific risk be diversified away by investing in both PepsiCo and Molson Coors 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 PepsiCo and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PepsiCo and Molson Coors Brewing, you can compare the effects of market volatilities on PepsiCo and Molson Coors 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 PepsiCo with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepsiCo and Molson Coors.
Diversification Opportunities for PepsiCo and Molson Coors
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PepsiCo and Molson is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding PepsiCo and Molson Coors Brewing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Brewing and PepsiCo 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 PepsiCo are associated (or correlated) with Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Brewing has no effect on the direction of PepsiCo i.e., PepsiCo and Molson Coors go up and down completely randomly.
Pair Corralation between PepsiCo and Molson Coors
Considering the 90-day investment horizon PepsiCo is expected to under-perform the Molson Coors. But the stock apears to be less risky and, when comparing its historical volatility, PepsiCo is 1.36 times less risky than Molson Coors. The stock trades about -0.06 of its potential returns per unit of risk. The Molson Coors Brewing is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 5,447 in Molson Coors Brewing on September 1, 2024 and sell it today you would earn a total of 759.00 from holding Molson Coors Brewing or generate 13.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PepsiCo vs. Molson Coors Brewing
Performance |
| Timeline |
| PepsiCo |
| Molson Coors Brewing |
PepsiCo and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepsiCo and Molson Coors
The main advantage of trading using opposite PepsiCo and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepsiCo position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' long position.| PepsiCo vs. Coca Cola Femsa SAB | PepsiCo vs. National Beverage Corp | PepsiCo vs. Embotelladora Andina SA |
| Molson Coors vs. Budweiser Brewing | Molson Coors vs. Boston Beer | Molson Coors vs. Anheuser Busch InBev SANV | Molson Coors vs. Ambev SA ADR |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |