Correlation Between Molson Coors and Entegris

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

Diversification Opportunities for Molson Coors and Entegris

-0.06

Correlation Coefficient

Molson Coors  Entegris

Good diversification

The 3 months correlation between Molson and Entegris is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris 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 Entegris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entegris has no effect on the direction of Molson Coors i.e., Molson Coors and Entegris go up and down completely randomly.

Pair Corralation between Molson Coors and Entegris

Considering the 90-day investment horizon Molson Coors is expected to generate 10.04 times less return on investment than Entegris. But when comparing it to its historical volatility, Molson Coors Brewing is 1.16 times less risky than Entegris. It trades about 0.0 of its potential returns per unit of risk. Entegris is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  9,936  in Entegris on December 20, 2024 and sell it today you would earn a total of  101.00  from holding Entegris or generate 1.02% return on investment over 90 days.

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

Molson Coors Brewing  vs.  Entegris

Molson Coors Brewing

Risk-Adjusted Performance

Weak

Over the last 90 days Molson Coors Brewing has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Entegris

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Entegris are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Entegris is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Molson Coors and Entegris

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

The idea behind Molson Coors Brewing and Entegris 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.