Correlation Between Constellation Brands and MQGAU

Can any of the company-specific risk be diversified away by investing in both Constellation Brands and MQGAU 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 MQGAU 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 MQGAU 39 15 JAN 26, you can compare the effects of market volatilities on Constellation Brands and MQGAU 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 MQGAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Brands and MQGAU.

Diversification Opportunities for Constellation Brands and MQGAU

-0.64

Correlation Coefficient

Constellation Brands  MQGAU

Excellent diversification

The 3 months correlation between Constellation and MQGAU is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class and MQGAU 39 15 JAN 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MQGAU 15 JAN 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 MQGAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MQGAU 15 JAN has no effect on the direction of Constellation Brands i.e., Constellation Brands and MQGAU go up and down completely randomly.

Pair Corralation between Constellation Brands and MQGAU

Considering the 90-day investment horizon Constellation Brands Class is expected to under-perform the MQGAU. In addition to that, Constellation Brands is 2.61 times more volatile than MQGAU 39 15 JAN 26. It trades about -0.11 of its total potential returns per unit of risk. MQGAU 39 15 JAN 26 is currently generating about 0.03 per unit of volatility. If you would invest  9,790  in MQGAU 39 15 JAN 26 on December 25, 2024 and sell it today you would earn a total of  52.00  from holding MQGAU 39 15 JAN 26 or generate 0.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	28.81%
Values	Daily Returns

Constellation Brands Class  vs.  MQGAU 39 15 JAN 26

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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MQGAU 15 JAN

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MQGAU 39 15 JAN 26 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, MQGAU is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Constellation Brands and MQGAU

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

The idea behind Constellation Brands Class and MQGAU 39 15 JAN 26 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.