Correlation Between Molson Coors and Fomento Economico
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Fomento Economico 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 Fomento Economico 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 Fomento Economico Mexicano, you can compare the effects of market volatilities on Molson Coors and Fomento Economico 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 Fomento Economico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Fomento Economico.
Diversification Opportunities for Molson Coors and Fomento Economico
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Molson and Fomento is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Fomento Economico Mexicano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento Economico 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 Fomento Economico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento Economico has no effect on the direction of Molson Coors i.e., Molson Coors and Fomento Economico go up and down completely randomly.
Pair Corralation between Molson Coors and Fomento Economico
Assuming the 90 days horizon Molson Coors Beverage is expected to generate 0.54 times more return on investment than Fomento Economico. However, Molson Coors Beverage is 1.85 times less risky than Fomento Economico. It trades about 0.35 of its potential returns per unit of risk. Fomento Economico Mexicano is currently generating about -0.52 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. Fomento Economico Mexicano
Performance |
| Timeline |
| Molson Coors Beverage |
| Fomento Economico |
Molson Coors and Fomento Economico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Fomento Economico
The main advantage of trading using opposite Molson Coors and Fomento Economico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Fomento Economico 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 Fomento Economico will offset losses from the drop in Fomento Economico'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 |
| Fomento Economico vs. Ambev SA ADR | Fomento Economico vs. Boston Beer | Fomento Economico vs. Carlsberg AS | Fomento Economico vs. Molson Coors Brewing |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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