Correlation Between Molson Coors and TFI International

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

Diversification Opportunities for Molson Coors and TFI International

0.83

Correlation Coefficient

Molson Coors  TFI International

Very poor diversification

The 3 months correlation between Molson and TFI is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and TFI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFI International 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 TFI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFI International has no effect on the direction of Molson Coors i.e., Molson Coors and TFI International go up and down completely randomly.

Pair Corralation between Molson Coors and TFI International

Considering the 90-day investment horizon Molson Coors Brewing is expected to under-perform the TFI International. But the stock apears to be less risky and, when comparing its historical volatility, Molson Coors Brewing is 1.48 times less risky than TFI International. The stock trades about 0.0 of its potential returns per unit of risk. The TFI International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  13,501  in TFI International on October 6, 2024 and sell it today you would lose (137.00) from holding TFI International or give up 1.01% of portfolio value over 90 days.

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

Molson Coors Brewing  vs.  TFI International

Molson Coors Brewing

Risk-Adjusted Performance

1 of 100

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.

TFI International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TFI International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, TFI International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Molson Coors and TFI International

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

The idea behind Molson Coors Brewing and TFI International 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.