Correlation Between Molson Coors and Unifique Telecomunicaes

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

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

Diversification Opportunities for Molson Coors and Unifique Telecomunicaes

0.63

Correlation Coefficient

Molson Coors  Unifique Telecomunicaes

Poor diversification

The 3 months correlation between Molson and Unifique is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Unifique Telecomunicaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unifique Telecomunicaes and Molson Coors 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 Molson Coors Beverage are associated (or correlated) with Unifique Telecomunicaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unifique Telecomunicaes has no effect on the direction of Molson Coors i.e., Molson Coors and Unifique Telecomunicaes go up and down completely randomly.

Pair Corralation between Molson Coors and Unifique Telecomunicaes

Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 0.69 times more return on investment than Unifique Telecomunicaes. However, Molson Coors Beverage is 1.46 times less risky than Unifique Telecomunicaes. It trades about 0.19 of its potential returns per unit of risk. Unifique Telecomunicaes SA is currently generating about 0.1 per unit of risk. If you would invest  29,735  in Molson Coors Beverage on December 24, 2024 and sell it today you would earn a total of  4,045  from holding Molson Coors Beverage or generate 13.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Molson Coors Beverage  vs.  Unifique Telecomunicaes SA

Molson Coors Beverage

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Beverage are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Molson Coors sustained solid returns over the last few months and may actually be approaching a breakup point.

Unifique Telecomunicaes

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Unifique Telecomunicaes SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Unifique Telecomunicaes may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Molson Coors and Unifique Telecomunicaes

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

The idea behind Molson Coors Beverage and Unifique Telecomunicaes SA 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.