Correlation Between Molson Coors and Aeries Technology

Can any of the company-specific risk be diversified away by investing in both Molson Coors and Aeries Technology 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 Aeries Technology 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 Aeries Technology, you can compare the effects of market volatilities on Molson Coors and Aeries Technology 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 Aeries Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Aeries Technology.

Diversification Opportunities for Molson Coors and Aeries Technology

0.13

Correlation Coefficient

Molson Coors  Aeries Technology

Average diversification

The 3 months correlation between Molson and Aeries is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology 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 Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of Molson Coors i.e., Molson Coors and Aeries Technology go up and down completely randomly.

Pair Corralation between Molson Coors and Aeries Technology

Considering the 90-day investment horizon Molson Coors is expected to generate 87.15 times less return on investment than Aeries Technology. But when comparing it to its historical volatility, Molson Coors Brewing is 24.88 times less risky than Aeries Technology. It trades about 0.05 of its potential returns per unit of risk. Aeries Technology is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  3.88  in Aeries Technology on October 9, 2024 and sell it today you would earn a total of  2.00  from holding Aeries Technology or generate 51.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	41.94%
Values	Daily Returns

Molson Coors Brewing  vs.  Aeries Technology

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.

Aeries Technology

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aeries Technology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Aeries Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Molson Coors and Aeries Technology

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

The idea behind Molson Coors Brewing and Aeries Technology 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.