Correlation Between Kellanova and Molson Coors

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

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

Diversification Opportunities for Kellanova and Molson Coors

0.52

Correlation Coefficient

Kellanova  Molson Coors

Very weak diversification

The 3 months correlation between Kellanova and Molson is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Molson Coors Brewing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Brewing and Kellanova 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 Kellanova 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 Brewing has no effect on the direction of Kellanova i.e., Kellanova and Molson Coors go up and down completely randomly.

Pair Corralation between Kellanova and Molson Coors

Taking into account the 90-day investment horizon Kellanova is expected to generate 3.27 times less return on investment than Molson Coors. But when comparing it to its historical volatility, Kellanova is 12.26 times less risky than Molson Coors. It trades about 0.21 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5,738  in Molson Coors Brewing on December 27, 2024 and sell it today you would earn a total of  359.00  from holding Molson Coors Brewing or generate 6.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Kellanova  vs.  Molson Coors Brewing

Kellanova

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Kellanova is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Molson Coors Brewing

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Brewing are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Molson Coors may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kellanova and Molson Coors

The main advantage of trading using opposite Kellanova and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova 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 Kellanova and Molson Coors Brewing 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.