Correlation Between Molson Coors and Consol Energy
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Consol Energy 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 Consol Energy 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 Consol Energy, you can compare the effects of market volatilities on Molson Coors and Consol Energy 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 Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Consol Energy.
Diversification Opportunities for Molson Coors and Consol Energy
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Molson and Consol is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy 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 Consol Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consol Energy has no effect on the direction of Molson Coors i.e., Molson Coors and Consol Energy go up and down completely randomly.
Pair Corralation between Molson Coors and Consol Energy
Considering the 90-day investment horizon Molson Coors is expected to generate 6.39 times less return on investment than Consol Energy. But when comparing it to its historical volatility, Molson Coors Brewing is 1.74 times less risky than Consol Energy. It trades about 0.01 of its potential returns per unit of risk. Consol Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10,350 in Consol Energy on September 2, 2024 and sell it today you would earn a total of 2,720 from holding Consol Energy or generate 26.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Brewing vs. Consol Energy
Performance |
| Timeline |
| Molson Coors Brewing |
| Consol Energy |
Molson Coors and Consol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Consol Energy
The main advantage of trading using opposite Molson Coors and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Consol Energy 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 Consol Energy will offset losses from the drop in Consol Energy'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 |
| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |