Correlation Between Molson Coors and Suntory Beverage

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

By analyzing existing cross correlation between Molson Coors Beverage and Suntory Beverage Food, you can compare the effects of market volatilities on Molson Coors and Suntory Beverage 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 Suntory Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Suntory Beverage.

Diversification Opportunities for Molson Coors and Suntory Beverage

0.73

Correlation Coefficient

Molson Coors  Suntory Beverage

Poor diversification

The 3 months correlation between Molson and Suntory is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Suntory Beverage Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntory Beverage Food 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 Coors Beverage are associated (or correlated) with Suntory Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntory Beverage Food has no effect on the direction of Molson Coors i.e., Molson Coors and Suntory Beverage go up and down completely randomly.

Pair Corralation between Molson Coors and Suntory Beverage

Assuming the 90 days horizon Molson Coors Beverage is expected to generate 2.49 times more return on investment than Suntory Beverage. However, Molson Coors is 2.49 times more volatile than Suntory Beverage Food. It trades about 0.04 of its potential returns per unit of risk. Suntory Beverage Food is currently generating about 0.05 per unit of risk. If you would invest  5,681  in Molson Coors Beverage on December 30, 2024 and sell it today you would earn a total of  243.00  from holding Molson Coors Beverage or generate 4.28% return on investment over 90 days.

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

Molson Coors Beverage  vs.  Suntory Beverage Food

Molson Coors Beverage

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Beverage are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Molson Coors may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Suntory Beverage Food

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Suntory Beverage Food are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Suntory Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Molson Coors and Suntory Beverage

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

The idea behind Molson Coors Beverage and Suntory Beverage Food 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..