Correlation Between Molson Coors and Heineken
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Heineken 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 Heineken 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 Heineken NV, you can compare the effects of market volatilities on Molson Coors and Heineken 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 Heineken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Heineken.
Diversification Opportunities for Molson Coors and Heineken
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Molson and Heineken is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Heineken NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken NV 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 Heineken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken NV has no effect on the direction of Molson Coors i.e., Molson Coors and Heineken go up and down completely randomly.
Pair Corralation between Molson Coors and Heineken
Assuming the 90 days horizon Molson Coors Beverage is expected to generate 0.93 times more return on investment than Heineken. However, Molson Coors Beverage is 1.08 times less risky than Heineken. It trades about 0.02 of its potential returns per unit of risk. Heineken NV is currently generating about -0.11 per unit of risk. If you would invest 5,810 in Molson Coors Beverage on August 24, 2024 and sell it today you would earn a total of 190.00 from holding Molson Coors Beverage or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. Heineken NV
Performance |
| Timeline |
| Molson Coors Beverage |
| Heineken NV |
Molson Coors and Heineken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Heineken
The main advantage of trading using opposite Molson Coors and Heineken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Heineken 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 Heineken will offset losses from the drop in Heineken'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 |
| Heineken vs. Anheuser Busch InBev SANV | Heineken vs. Carlsberg AS | Heineken vs. Molson Coors Brewing | Heineken vs. Compania Cervecerias Unidas |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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