Correlation Between MOLSON COORS and MaxLinear

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

By analyzing existing cross correlation between MOLSON RS BEVERAGE and MaxLinear, you can compare the effects of market volatilities on MOLSON COORS and MaxLinear 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 MaxLinear. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOLSON COORS and MaxLinear.

Diversification Opportunities for MOLSON COORS and MaxLinear

0.34

Correlation Coefficient

MOLSON COORS  MaxLinear

Weak diversification

The 3 months correlation between MOLSON and MaxLinear is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding MOLSON RS BEVERAGE and MaxLinear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MaxLinear 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 RS BEVERAGE are associated (or correlated) with MaxLinear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MaxLinear has no effect on the direction of MOLSON COORS i.e., MOLSON COORS and MaxLinear go up and down completely randomly.

Pair Corralation between MOLSON COORS and MaxLinear

Assuming the 90 days trading horizon MOLSON COORS is expected to generate 123.85 times less return on investment than MaxLinear. But when comparing it to its historical volatility, MOLSON RS BEVERAGE is 3.09 times less risky than MaxLinear. It trades about 0.01 of its potential returns per unit of risk. MaxLinear is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,385  in MaxLinear on October 24, 2024 and sell it today you would earn a total of  1,001  from holding MaxLinear or generate 72.27% return on investment over 90 days.

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

MOLSON RS BEVERAGE  vs.  MaxLinear

MOLSON RS BEVERAGE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MOLSON RS BEVERAGE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MOLSON COORS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MaxLinear

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MaxLinear are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, MaxLinear reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MOLSON COORS and MaxLinear

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

The idea behind MOLSON RS BEVERAGE and MaxLinear 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 Commodity Directory module to find actively traded commodities issued by global exchanges.