Correlation Between Molson Coors and Able View

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

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

Diversification Opportunities for Molson Coors and Able View

-0.54

Correlation Coefficient

Molson Coors  Able View

Excellent diversification

The 3 months correlation between Molson and Able is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Able View Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Able View Global 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 Brewing are associated (or correlated) with Able View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Able View Global has no effect on the direction of Molson Coors i.e., Molson Coors and Able View go up and down completely randomly.

Pair Corralation between Molson Coors and Able View

Considering the 90-day investment horizon Molson Coors is expected to generate 117.75 times less return on investment than Able View. But when comparing it to its historical volatility, Molson Coors Brewing is 25.59 times less risky than Able View. It trades about 0.03 of its potential returns per unit of risk. Able View Global is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  8.00  in Able View Global on October 8, 2024 and sell it today you would lose (6.00) from holding Able View Global or give up 75.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	40.51%
Values	Daily Returns

Molson Coors Brewing  vs.  Able View Global

Molson Coors Brewing

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Brewing are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Molson Coors is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Able View Global

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Able View Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly uncertain basic indicators, Able View showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Molson Coors and Able View

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

The idea behind Molson Coors Brewing and Able View Global 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..