Correlation Between Molson Coors and Smurfit WestRock
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Smurfit WestRock 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 Smurfit WestRock 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 Smurfit WestRock plc, you can compare the effects of market volatilities on Molson Coors and Smurfit WestRock 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 Smurfit WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Smurfit WestRock.
Diversification Opportunities for Molson Coors and Smurfit WestRock
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Molson and Smurfit is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Smurfit WestRock plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smurfit WestRock plc 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 Smurfit WestRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smurfit WestRock plc has no effect on the direction of Molson Coors i.e., Molson Coors and Smurfit WestRock go up and down completely randomly.
Pair Corralation between Molson Coors and Smurfit WestRock
Considering the 90-day investment horizon Molson Coors Brewing is expected to under-perform the Smurfit WestRock. But the stock apears to be less risky and, when comparing its historical volatility, Molson Coors Brewing is 2.08 times less risky than Smurfit WestRock. The stock trades about -0.23 of its potential returns per unit of risk. The Smurfit WestRock plc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5,068 in Smurfit WestRock plc on September 14, 2024 and sell it today you would earn a total of 280.00 from holding Smurfit WestRock plc or generate 5.52% 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. Smurfit WestRock plc
Performance |
| Timeline |
| Molson Coors Brewing |
| Smurfit WestRock plc |
Molson Coors and Smurfit WestRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Smurfit WestRock
The main advantage of trading using opposite Molson Coors and Smurfit WestRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Smurfit WestRock 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 Smurfit WestRock will offset losses from the drop in Smurfit WestRock's long position.| Molson Coors vs. Fomento Economico Mexicano | Molson Coors vs. Boston Beer | Molson Coors vs. Carlsberg AS | Molson Coors vs. Compania Cervecerias Unidas |
| Smurfit WestRock vs. Chemours Co | Smurfit WestRock vs. Summit Materials | Smurfit WestRock vs. Avient Corp | Smurfit WestRock vs. Western Copper and |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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