Correlation Between Molson Coors and Sonos

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

Diversification Opportunities for Molson Coors and Sonos

-0.42

Correlation Coefficient

Molson Coors  Sonos

Very good diversification

The 3 months correlation between Molson and Sonos is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Sonos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonos Inc 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 Sonos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonos Inc has no effect on the direction of Molson Coors i.e., Molson Coors and Sonos go up and down completely randomly.

Pair Corralation between Molson Coors and Sonos

Considering the 90-day investment horizon Molson Coors Brewing is expected to generate 0.83 times more return on investment than Sonos. However, Molson Coors Brewing is 1.2 times less risky than Sonos. It trades about 0.02 of its potential returns per unit of risk. Sonos Inc is currently generating about -0.15 per unit of risk. If you would invest  5,821  in Molson Coors Brewing on December 19, 2024 and sell it today you would earn a total of  73.00  from holding Molson Coors Brewing or generate 1.25% return on investment over 90 days.

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

Molson Coors Brewing  vs.  Sonos Inc

Molson Coors Brewing

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Brewing are ranked lower than 1 (%) 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.

Sonos Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sonos Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Molson Coors and Sonos

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

The idea behind Molson Coors Brewing and Sonos Inc 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.