Correlation Between RTL GROUP and MOLSON COORS

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

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

Diversification Opportunities for RTL GROUP and MOLSON COORS

0.71

Correlation Coefficient

RTL GROUP  MOLSON COORS

Poor diversification

The 3 months correlation between RTL and MOLSON is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding RTL GROUP and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE and RTL GROUP 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 RTL GROUP 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 RS BEVERAGE has no effect on the direction of RTL GROUP i.e., RTL GROUP and MOLSON COORS go up and down completely randomly.

Pair Corralation between RTL GROUP and MOLSON COORS

Assuming the 90 days trading horizon RTL GROUP is expected to generate 0.46 times more return on investment than MOLSON COORS. However, RTL GROUP is 2.15 times less risky than MOLSON COORS. It trades about 0.35 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about 0.1 per unit of risk. If you would invest  2,650  in RTL GROUP on December 20, 2024 and sell it today you would earn a total of  935.00  from holding RTL GROUP or generate 35.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.67%
Values	Daily Returns

RTL GROUP  vs.  MOLSON RS BEVERAGE

RTL GROUP

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in RTL GROUP are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, RTL GROUP unveiled solid returns over the last few months and may actually be approaching a breakup point.

MOLSON RS BEVERAGE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MOLSON RS BEVERAGE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MOLSON COORS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RTL GROUP and MOLSON COORS

The main advantage of trading using opposite RTL GROUP and MOLSON COORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTL GROUP 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's long position.

The idea behind RTL GROUP and MOLSON RS 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.