Correlation Between Molson Coors and Citizens Financial

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

Diversification Opportunities for Molson Coors and Citizens Financial

0.37

Correlation Coefficient

Molson Coors  Citizens Financial

Weak diversification

The 3 months correlation between Molson and Citizens is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Citizens Financial Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Group, 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 Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Group, has no effect on the direction of Molson Coors i.e., Molson Coors and Citizens Financial go up and down completely randomly.

Pair Corralation between Molson Coors and Citizens Financial

Considering the 90-day investment horizon Molson Coors Brewing is expected to generate 3.27 times more return on investment than Citizens Financial. However, Molson Coors is 3.27 times more volatile than Citizens Financial Group,. It trades about 0.11 of its potential returns per unit of risk. Citizens Financial Group, is currently generating about 0.23 per unit of risk. If you would invest  5,690  in Molson Coors Brewing on September 1, 2024 and sell it today you would earn a total of  516.00  from holding Molson Coors Brewing or generate 9.07% return on investment over 90 days.

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

Molson Coors Brewing  vs.  Citizens Financial Group,

Molson Coors Brewing

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Brewing are ranked lower than 8 (%) 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 December 2024.

Citizens Financial Group,

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Group, are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Citizens Financial is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Molson Coors and Citizens Financial

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

The idea behind Molson Coors Brewing and Citizens Financial Group, 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.