Correlation Between Molson Coors and Budweiser Brewing

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Budweiser Brewing 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 Budweiser Brewing 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 Budweiser Brewing, you can compare the effects of market volatilities on Molson Coors and Budweiser Brewing 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 Budweiser Brewing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Budweiser Brewing.

Diversification Opportunities for Molson Coors and Budweiser Brewing

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between Molson and Budweiser is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Budweiser Brewing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Budweiser Brewing 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 Budweiser Brewing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Budweiser Brewing has no effect on the direction of Molson Coors i.e., Molson Coors and Budweiser Brewing go up and down completely randomly.

Pair Corralation between Molson Coors and Budweiser Brewing

Considering the 90-day investment horizon Molson Coors is expected to generate 3.86 times less return on investment than Budweiser Brewing. But when comparing it to its historical volatility, Molson Coors Brewing is 1.83 times less risky than Budweiser Brewing. It trades about 0.07 of its potential returns per unit of risk. Budweiser Brewing is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  91.00  in Budweiser Brewing on December 29, 2024 and sell it today you would earn a total of  33.00  from holding Budweiser Brewing or generate 36.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.39%
ValuesDaily Returns

Molson Coors Brewing  vs.  Budweiser Brewing

 Performance 
       Timeline  
Molson Coors Brewing 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Brewing are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Molson Coors may actually be approaching a critical reversion point that can send shares even higher in April 2025.
Budweiser Brewing 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Budweiser Brewing are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, Budweiser Brewing reported solid returns over the last few months and may actually be approaching a breakup point.

Molson Coors and Budweiser Brewing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Molson Coors and Budweiser Brewing

The main advantage of trading using opposite Molson Coors and Budweiser Brewing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Budweiser Brewing 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 Budweiser Brewing will offset losses from the drop in Budweiser Brewing's long position.
The idea behind Molson Coors Brewing and Budweiser Brewing 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 Global Correlations module to find global opportunities by holding instruments from different markets.

Other Complementary Tools

Content Syndication
Quickly integrate customizable finance content to your own investment portal
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world