Correlation Between Molson Coors and Alphabet

Can any of the company-specific risk be diversified away by investing in both Molson Coors and Alphabet 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 Alphabet 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 Alphabet, you can compare the effects of market volatilities on Molson Coors and Alphabet 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 Alphabet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Alphabet.

Diversification Opportunities for Molson Coors and Alphabet

-0.95

Correlation Coefficient

Molson Coors  Alphabet

Pay attention - limited upside

The 3 months correlation between Molson and Alphabet is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Alphabet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphabet 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 Alphabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphabet has no effect on the direction of Molson Coors i.e., Molson Coors and Alphabet go up and down completely randomly.

Pair Corralation between Molson Coors and Alphabet

Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 0.7 times more return on investment than Alphabet. However, Molson Coors Beverage is 1.43 times less risky than Alphabet. It trades about 0.19 of its potential returns per unit of risk. Alphabet is currently generating about -0.22 per unit of risk. If you would invest  29,735  in Molson Coors Beverage on December 25, 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 Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Molson Coors Beverage  vs.  Alphabet

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.

Alphabet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphabet has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Molson Coors and Alphabet

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

The idea behind Molson Coors Beverage and Alphabet 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.