Correlation Between Molson Coors and Constellation Brands
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Constellation Brands 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 Constellation Brands 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 Constellation Brands Class, you can compare the effects of market volatilities on Molson Coors and Constellation Brands 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 Constellation Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Constellation Brands.
Diversification Opportunities for Molson Coors and Constellation Brands
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Molson and Constellation is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Constellation Brands Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Brands 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 Constellation Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Brands has no effect on the direction of Molson Coors i.e., Molson Coors and Constellation Brands go up and down completely randomly.
Pair Corralation between Molson Coors and Constellation Brands
Considering the 90-day investment horizon Molson Coors Brewing is expected to generate 0.98 times more return on investment than Constellation Brands. However, Molson Coors Brewing is 1.02 times less risky than Constellation Brands. It trades about 0.17 of its potential returns per unit of risk. Constellation Brands Class is currently generating about -0.05 per unit of risk. If you would invest 5,392 in Molson Coors Brewing on September 12, 2024 and sell it today you would earn a total of 782.00 from holding Molson Coors Brewing or generate 14.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Molson Coors Brewing vs. Constellation Brands Class
Performance |
Timeline |
Molson Coors Brewing |
Constellation Brands |
Molson Coors and Constellation Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Molson Coors and Constellation Brands
The main advantage of trading using opposite Molson Coors and Constellation Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Constellation Brands 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 Constellation Brands will offset losses from the drop in Constellation Brands' 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 |
Constellation Brands vs. Brown Forman | Constellation Brands vs. Duckhorn Portfolio | Constellation Brands vs. MGP Ingredients | Constellation Brands vs. Brown Forman |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Transaction History View history of all your transactions and understand their impact on performance | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |