Correlation Between MOLSON COORS and Lockheed Martin

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

Diversification Opportunities for MOLSON COORS and Lockheed Martin

-0.72

Correlation Coefficient

MOLSON COORS  Lockheed Martin

Pay attention - limited upside

The 3 months correlation between MOLSON and Lockheed is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding MOLSON RS BEVERAGE and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin 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 Lockheed Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lockheed Martin has no effect on the direction of MOLSON COORS i.e., MOLSON COORS and Lockheed Martin go up and down completely randomly.

Pair Corralation between MOLSON COORS and Lockheed Martin

Assuming the 90 days trading horizon MOLSON RS BEVERAGE is expected to generate 1.05 times more return on investment than Lockheed Martin. However, MOLSON COORS is 1.05 times more volatile than Lockheed Martin. It trades about 0.07 of its potential returns per unit of risk. Lockheed Martin is currently generating about -0.2 per unit of risk. If you would invest  5,060  in MOLSON RS BEVERAGE on October 9, 2024 and sell it today you would earn a total of  340.00  from holding MOLSON RS BEVERAGE or generate 6.72% return on investment over 90 days.

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

MOLSON RS BEVERAGE  vs.  Lockheed Martin

MOLSON RS BEVERAGE

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MOLSON RS BEVERAGE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, MOLSON COORS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Lockheed Martin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lockheed Martin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with MOLSON COORS and Lockheed Martin

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

The idea behind MOLSON RS BEVERAGE and Lockheed Martin 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.