Correlation Between Molson Coors and Grupo Simec

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

Diversification Opportunities for Molson Coors and Grupo Simec

-0.46

Correlation Coefficient

Molson Coors  Grupo Simec

Very good diversification

The 3 months correlation between Molson and Grupo is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Grupo Simec SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Simec SAB 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 Grupo Simec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Simec SAB has no effect on the direction of Molson Coors i.e., Molson Coors and Grupo Simec go up and down completely randomly.

Pair Corralation between Molson Coors and Grupo Simec

Considering the 90-day investment horizon Molson Coors Brewing is expected to generate 0.45 times more return on investment than Grupo Simec. However, Molson Coors Brewing is 2.23 times less risky than Grupo Simec. It trades about 0.17 of its potential returns per unit of risk. Grupo Simec SAB is currently generating about -0.01 per unit of risk. If you would invest  5,392  in Molson Coors Brewing on September 12, 2024 and sell it today you would earn a total of  782.00  from holding Molson Coors Brewing or generate 14.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.94%
Values	Daily Returns

Molson Coors Brewing  vs.  Grupo Simec SAB

Molson Coors Brewing

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Brewing are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Molson Coors reported solid returns over the last few months and may actually be approaching a breakup point.

Grupo Simec SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Simec SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Grupo Simec is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Molson Coors and Grupo Simec

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

The idea behind Molson Coors Brewing and Grupo Simec SAB 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.