Correlation Between Kaival Brands and Molson Coors

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

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

Diversification Opportunities for Kaival Brands and Molson Coors

-0.54

Correlation Coefficient

Kaival Brands  Molson Coors

Excellent diversification

The 3 months correlation between Kaival and Molson is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kaival Brands Innovations 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 Kaival Brands 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 Kaival Brands Innovations 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 Kaival Brands i.e., Kaival Brands and Molson Coors go up and down completely randomly.

Pair Corralation between Kaival Brands and Molson Coors

Given the investment horizon of 90 days Kaival Brands Innovations is expected to generate 5.22 times more return on investment than Molson Coors. However, Kaival Brands is 5.22 times more volatile than Molson Coors Brewing. It trades about 0.17 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about -0.14 per unit of risk. If you would invest  72.00  in Kaival Brands Innovations on September 25, 2024 and sell it today you would earn a total of  11.00  from holding Kaival Brands Innovations or generate 15.28% return on investment over 90 days.

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

Kaival Brands Innovations  vs.  Molson Coors Brewing

Kaival Brands Innovations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaival Brands Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Molson Coors Brewing

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Brewing are ranked lower than 7 (%) 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 January 2025.

Pair Trading with Kaival Brands and Molson Coors

The main advantage of trading using opposite Kaival Brands and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaival Brands 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 Kaival Brands Innovations 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.