Correlation Between Kinnevik Investment and Molson Coors

Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Molson Coors 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 Kinnevik Investment and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kinnevik Investment AB and Molson Coors Beverage, you can compare the effects of market volatilities on Kinnevik Investment and Molson Coors 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 Kinnevik Investment with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Molson Coors.

Diversification Opportunities for Kinnevik Investment and Molson Coors

-0.22

Correlation Coefficient

Kinnevik Investment  Molson Coors

Very good diversification

The 3 months correlation between Kinnevik and Molson is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Molson Coors Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Beverage and Kinnevik Investment 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 Kinnevik Investment AB are associated (or correlated) with Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Beverage has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Molson Coors go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Molson Coors

Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Molson Coors. In addition to that, Kinnevik Investment is 1.83 times more volatile than Molson Coors Beverage. It trades about -0.1 of its total potential returns per unit of risk. Molson Coors Beverage is currently generating about -0.12 per unit of volatility. If you would invest  6,010  in Molson Coors Beverage on September 27, 2024 and sell it today you would lose (142.00) from holding Molson Coors Beverage or give up 2.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Kinnevik Investment AB  vs.  Molson Coors Beverage

Kinnevik Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinnevik Investment AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Molson Coors Beverage

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Beverage are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Molson Coors is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kinnevik Investment and Molson Coors

The main advantage of trading using opposite Kinnevik Investment and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' long position.

The idea behind Kinnevik Investment AB and Molson Coors Beverage pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.