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 Brewing 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
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Molson and Carlsberg is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing 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 Brewing 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
Considering the 90-day investment horizon Molson Coors Brewing is expected to under-perform the Carlsberg. But the stock apears to be less risky and, when comparing its historical volatility, Molson Coors Brewing is 5.45 times less risky than Carlsberg. The stock trades about -0.06 of its potential returns per unit of risk. The Carlsberg AS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9,885 in Carlsberg AS on September 15, 2024 and sell it today you would earn a total of 15.00 from holding Carlsberg AS or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Brewing vs. Carlsberg AS
Performance |
| Timeline |
| Molson Coors Brewing |
| 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. Budweiser Brewing | Molson Coors vs. Boston Beer | Molson Coors vs. Anheuser Busch InBev SANV | Molson Coors vs. Ambev SA ADR |
| Carlsberg vs. Anheuser Busch InBev SANV | Carlsberg vs. Anheuser Busch Inbev | Carlsberg vs. Molson Coors Brewing | Carlsberg vs. Heineken NV |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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