Correlation Between Crown Holdings and MOLSON COORS

Can any of the company-specific risk be diversified away by investing in both Crown Holdings 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 Crown Holdings and MOLSON COORS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crown Holdings and MOLSON RS BEVERAGE, you can compare the effects of market volatilities on Crown Holdings 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 Crown Holdings with a short position of MOLSON COORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Holdings and MOLSON COORS.

Diversification Opportunities for Crown Holdings and MOLSON COORS

-0.01

Correlation Coefficient

Crown Holdings  MOLSON COORS

Good diversification

The 3 months correlation between Crown and MOLSON is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Crown Holdings and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE and Crown Holdings 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 Crown Holdings 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 RS BEVERAGE has no effect on the direction of Crown Holdings i.e., Crown Holdings and MOLSON COORS go up and down completely randomly.

Pair Corralation between Crown Holdings and MOLSON COORS

Assuming the 90 days horizon Crown Holdings is expected to generate 3.94 times less return on investment than MOLSON COORS. But when comparing it to its historical volatility, Crown Holdings is 1.81 times less risky than MOLSON COORS. It trades about 0.05 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5,613  in MOLSON RS BEVERAGE on December 20, 2024 and sell it today you would earn a total of  987.00  from holding MOLSON RS BEVERAGE or generate 17.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Crown Holdings  vs.  MOLSON RS BEVERAGE

Crown Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Crown Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Crown Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MOLSON RS BEVERAGE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MOLSON RS BEVERAGE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MOLSON COORS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crown Holdings and MOLSON COORS

The main advantage of trading using opposite Crown Holdings and MOLSON COORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Holdings 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's long position.

The idea behind Crown Holdings and MOLSON RS 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.