Correlation Between Aedas Homes and Molson Coors

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Can any of the company-specific risk be diversified away by investing in both Aedas Homes 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 Aedas Homes and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedas Homes SA and Molson Coors Beverage, you can compare the effects of market volatilities on Aedas Homes 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 Aedas Homes with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and Molson Coors.

Diversification Opportunities for Aedas Homes and Molson Coors

AedasMolsonDiversified AwayAedasMolsonDiversified Away100%
-0.64
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Aedas and Molson is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA 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 Aedas Homes 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 Aedas Homes SA 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 Aedas Homes i.e., Aedas Homes and Molson Coors go up and down completely randomly.

Pair Corralation between Aedas Homes and Molson Coors

Assuming the 90 days horizon Aedas Homes SA is expected to generate 1.08 times more return on investment than Molson Coors. However, Aedas Homes is 1.08 times more volatile than Molson Coors Beverage. It trades about 0.15 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about -0.04 per unit of risk. If you would invest  2,387  in Aedas Homes SA on November 18, 2024 and sell it today you would earn a total of  408.00  from holding Aedas Homes SA or generate 17.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Aedas Homes SA  vs.  Molson Coors Beverage

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-5051015
JavaScript chart by amCharts 3.21.151QK NY7
       Timeline  
Aedas Homes SA 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Aedas Homes SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aedas Homes reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb24252627282930
Molson Coors Beverage 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Molson Coors Beverage has generated negative risk-adjusted returns adding no value to investors with long positions. 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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5152535455565758

Aedas Homes and Molson Coors Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.58-4.18-2.78-1.380.01.493.04.526.03 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.151QK NY7
       Returns  

Pair Trading with Aedas Homes and Molson Coors

The main advantage of trading using opposite Aedas Homes and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes 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 Aedas Homes SA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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