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 Brewing 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
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Molson and Heineken is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing 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 Brewing 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
Considering the 90-day investment horizon Molson Coors Brewing is expected to under-perform the Heineken. But the stock apears to be less risky and, when comparing its historical volatility, Molson Coors Brewing is 1.05 times less risky than Heineken. The stock trades about -0.2 of its potential returns per unit of risk. The Heineken NV is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 7,018 in Heineken NV on October 21, 2024 and sell it today you would lose (395.00) from holding Heineken NV or give up 5.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Brewing vs. Heineken NV
Performance |
| Timeline |
| Molson Coors Brewing |
| 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. Budweiser Brewing | Molson Coors vs. Boston Beer | Molson Coors vs. Anheuser Busch InBev SANV | Molson Coors vs. Ambev SA ADR |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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