Correlation Between Molson Coors and Materialise

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

Diversification Opportunities for Molson Coors and Materialise

0.91

Correlation Coefficient

Molson Coors  Materialise

Almost no diversification

The 3 months correlation between Molson and Materialise is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV 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 Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of Molson Coors i.e., Molson Coors and Materialise go up and down completely randomly.

Pair Corralation between Molson Coors and Materialise

Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 0.46 times more return on investment than Materialise. However, Molson Coors Beverage is 2.16 times less risky than Materialise. It trades about 0.04 of its potential returns per unit of risk. Materialise NV is currently generating about -0.01 per unit of risk. If you would invest  4,617  in Molson Coors Beverage on September 27, 2024 and sell it today you would earn a total of  1,055  from holding Molson Coors Beverage or generate 22.85% return on investment over 90 days.

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

Molson Coors Beverage  vs.  Materialise NV

Molson Coors Beverage

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Beverage are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Molson Coors unveiled solid returns over the last few months and may actually be approaching a breakup point.

Materialise NV

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with Molson Coors and Materialise

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

The idea behind Molson Coors Beverage and Materialise NV 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.