Correlation Between Macerich and Molson Coors

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

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

Diversification Opportunities for Macerich and Molson Coors

0.8

Correlation Coefficient

Macerich  Molson Coors

Very poor diversification

The 3 months correlation between Macerich and Molson is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding The Macerich and Molson Coors Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Beverage and Macerich 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 The Macerich 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 Beverage has no effect on the direction of Macerich i.e., Macerich and Molson Coors go up and down completely randomly.

Pair Corralation between Macerich and Molson Coors

Assuming the 90 days horizon The Macerich is expected to generate 1.71 times more return on investment than Molson Coors. However, Macerich is 1.71 times more volatile than Molson Coors Beverage. It trades about -0.09 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about -0.4 per unit of risk. If you would invest  2,021  in The Macerich on October 13, 2024 and sell it today you would lose (72.00) from holding The Macerich or give up 3.56% of portfolio value over 90 days.

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

The Macerich  vs.  Molson Coors Beverage

Macerich

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Macerich are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Macerich reported solid returns over the last few months and may actually be approaching a breakup point.

Molson Coors Beverage

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Macerich and Molson Coors

The main advantage of trading using opposite Macerich and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macerich 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 The Macerich and Molson Coors 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.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.