Correlation Between Molson Coors and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Carlsberg 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 Carlsberg 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 Carlsberg AS, you can compare the effects of market volatilities on Molson Coors and Carlsberg 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 Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Carlsberg.
Diversification Opportunities for Molson Coors and Carlsberg
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Molson and Carlsberg is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS 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 Carlsberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg AS has no effect on the direction of Molson Coors i.e., Molson Coors and Carlsberg go up and down completely randomly.
Pair Corralation between Molson Coors and Carlsberg
Assuming the 90 days horizon Molson Coors Beverage is expected to generate 0.33 times more return on investment than Carlsberg. However, Molson Coors Beverage is 3.06 times less risky than Carlsberg. It trades about 0.35 of its potential returns per unit of risk. Carlsberg AS is currently generating about -0.27 per unit of risk. If you would invest 5,750 in Molson Coors Beverage on August 27, 2024 and sell it today you would earn a total of 250.00 from holding Molson Coors Beverage or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. Carlsberg AS
Performance |
| Timeline |
| Molson Coors Beverage |
| Carlsberg AS |
Molson Coors and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Carlsberg
The main advantage of trading using opposite Molson Coors and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Carlsberg 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 Carlsberg will offset losses from the drop in Carlsberg's long position.| Molson Coors vs. Compania Cervecerias Unidas | Molson Coors vs. Boston Beer | Molson Coors vs. Ambev SA ADR | Molson Coors vs. Molson Coors Brewing |
| Carlsberg vs. Barfresh Food Group | Carlsberg vs. Fbec Worldwide | Carlsberg vs. Flow Beverage Corp | Carlsberg vs. Eq Energy Drink |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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