Correlation Between Summit Materials and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Summit Materials 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 Summit Materials and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and Molson Coors Brewing, you can compare the effects of market volatilities on Summit Materials 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 Summit Materials with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Molson Coors.
Diversification Opportunities for Summit Materials and Molson Coors
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Summit and Molson is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials 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 Summit Materials 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 Summit Materials 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 Summit Materials i.e., Summit Materials and Molson Coors go up and down completely randomly.
Pair Corralation between Summit Materials and Molson Coors
Considering the 90-day investment horizon Summit Materials is expected to generate 0.22 times more return on investment than Molson Coors. However, Summit Materials is 4.52 times less risky than Molson Coors. It trades about 0.28 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about -0.09 per unit of risk. If you would invest 5,095 in Summit Materials on November 3, 2024 and sell it today you would earn a total of 136.00 from holding Summit Materials or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Materials vs. Molson Coors Brewing
Performance |
| Timeline |
| Summit Materials |
| Molson Coors Brewing |
Summit Materials and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Molson Coors
The main advantage of trading using opposite Summit Materials and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials 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.| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. United States Lime | Summit Materials vs. James Hardie Industries |
| 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 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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