Correlation Between Constellation Brands and Coursera

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

By analyzing existing cross correlation between Constellation Brands Class and Coursera, you can compare the effects of market volatilities on Constellation Brands and Coursera 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 Constellation Brands with a short position of Coursera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Brands and Coursera.

Diversification Opportunities for Constellation Brands and Coursera

-0.05

Correlation Coefficient

Constellation Brands  Coursera

Good diversification

The 3 months correlation between Constellation and Coursera is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class and Coursera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coursera and Constellation Brands 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 Constellation Brands Class are associated (or correlated) with Coursera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coursera has no effect on the direction of Constellation Brands i.e., Constellation Brands and Coursera go up and down completely randomly.

Pair Corralation between Constellation Brands and Coursera

Considering the 90-day investment horizon Constellation Brands Class is expected to generate 0.81 times more return on investment than Coursera. However, Constellation Brands Class is 1.23 times less risky than Coursera. It trades about -0.09 of its potential returns per unit of risk. Coursera is currently generating about -0.09 per unit of risk. If you would invest  21,969  in Constellation Brands Class on December 31, 2024 and sell it today you would lose (3,595) from holding Constellation Brands Class or give up 16.36% of portfolio value over 90 days.

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

Constellation Brands Class  vs.  Coursera

Constellation Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Constellation Brands Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Coursera

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coursera has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Constellation Brands and Coursera

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

The idea behind Constellation Brands Class and Coursera 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .