Correlation Between Molson Coors and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Berkshire Hathaway 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 Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molson Coors Canada and Berkshire Hathaway CDR, you can compare the effects of market volatilities on Molson Coors and Berkshire Hathaway 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 Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Berkshire Hathaway.
Diversification Opportunities for Molson Coors and Berkshire Hathaway
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Molson and Berkshire is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Canada and Berkshire Hathaway CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway CDR 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 Canada are associated (or correlated) with Berkshire Hathaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hathaway CDR has no effect on the direction of Molson Coors i.e., Molson Coors and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Molson Coors and Berkshire Hathaway
Assuming the 90 days trading horizon Molson Coors Canada is expected to generate 1.36 times more return on investment than Berkshire Hathaway. However, Molson Coors is 1.36 times more volatile than Berkshire Hathaway CDR. It trades about 0.34 of its potential returns per unit of risk. Berkshire Hathaway CDR is currently generating about 0.23 per unit of risk. If you would invest 7,751 in Molson Coors Canada on August 31, 2024 and sell it today you would earn a total of 949.00 from holding Molson Coors Canada or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
Molson Coors Canada vs. Berkshire Hathaway CDR
Performance |
| Timeline |
| Molson Coors Canada |
| Berkshire Hathaway CDR |
Molson Coors and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Berkshire Hathaway
The main advantage of trading using opposite Molson Coors and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Berkshire Hathaway 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 Berkshire Hathaway will offset losses from the drop in Berkshire Hathaway's long position.| Molson Coors vs. Maple Leaf Foods | Molson Coors vs. Saputo Inc | Molson Coors vs. Forstrong Global Income | Molson Coors vs. iShares Canadian HYBrid |
| Berkshire Hathaway vs. iShares Canadian HYBrid | Berkshire Hathaway vs. Brompton European Dividend | Berkshire Hathaway vs. Solar Alliance Energy | Berkshire Hathaway vs. PHN Multi Style All Cap |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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